Can a life insurance company refuse payment to the beneficiaries?

Answer 1

A life insurance policiy is a contract. If the terms of the contract are upheld, the company must pay the claim.

CORRECT ANSWER: The answer above is correct in the first sentence only. It is a contract and per the terms of the contract, the insurance company will pay the claim except for a few exclusions. If the insured dies as a result of suicide withing the first two years the company will only pay the amount of premiums paid plus interest. If the insured lying on the application during the 2 year contestable period, they committed material misrepresentation thereby voiding the contract. An example of this would be not disclosing important medical information or otherwise lying to the insurance company to a degree that the policy would probably not have been originally issued as applied for. In certain instances such as lying about your age, and everything else was alright, the policy would be adjusted to the amount that the premium paid would have purchased if the insured would have told the truth. So you see that a contract is only as good as the truthfulness of the parties to the contract. Always tell the truth to an insurance company if you expect them to keep their of the deal. Don't jeopardize valuable coverage by an ill conceived attempt to defraud as the penalty may be more than you are will to pay. For full disclosure, I own and operate a small Independent Insurance Agency in Georgia and have for the past 22 years. I also worked for a direct writer for the 3 years before that.