If a death claim is filed during the contestability period (typically the first two years after the policy was issued), the carrier has the right to conduct a thorough investigation into the accuracy of the original application before paying the claim. This does not mean the claim will be denied — it means the carrier will verify that the information provided on the application was accurate and that there were no material misrepresentations.
During a contestability investigation, the carrier will typically request the insured's medical records from physicians, hospitals, and pharmacies for the period before and after the application. They will check prescription databases to verify medication disclosures, review the MIB (Medical Information Bureau) record for consistency, and examine any other relevant documentation. The investigation may take several weeks to several months.
If the investigation reveals no material misrepresentations, the carrier will pay the full death benefit. If a material misrepresentation is found — such as an undisclosed health condition that would have affected the underwriting decision — the carrier may deny the claim and refund premiums paid, or may adjust the benefit to reflect what would have been issued with accurate information.
Beneficiaries whose claims are investigated during the contestability period should cooperate fully with the carrier's information requests to avoid unnecessary delays. If a claim is denied during the contestability period, the beneficiary has the right to dispute the denial — first through the carrier's internal review process, then through the TDCI, and potentially through legal action. The carrier bears the burden of proving that the misrepresentation was material.