Invalidating life insurance
When misstatements are made on that application, such as when a smoker says he doesn’t smoke, or a skydiver says she doesn’t skydive, the insurer can often use that misinformation to invalidate the insurance — even after the insured dies.Fortunately, California and most other states have”incontestability” laws which prohibit insurance companies from invalidating policies and refusing to pay benefits after a period of time.
This is what happened to one of our clients very recently. Transamerica Life Insurance Company denied the large life insurance benefit claim alleging that the insured failed to reveal an earlier bout with cancer, shortly before he applied for the Transamerica policy. But, upon analysis of all the facts and records, we learned that the insured was more truthful on his application, than not.Similarly, life insurance companies will offer insurance to daredevils such as skydivers even though they put their lives on the line in a way most of us do not.It seems that with prisoners the key difference, in the eyes of life insurance companies, is the moral aspect, the uncertainty of prison life, and that prisoners are more likely to make enemies.Moving requires many considerations, whether it is for business or pleasure.While most people think about updating their addresses and telephone numbers with providers, they usually do not think that their move can affect the validity of policies such as life insurance.