Can a life insurance company ask for further substantiation after a policy is in force?

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Can a life insurance company ask for further substantiation after a policy is in force?

Life insurance company requesting policyholder to substantiate finances just before 2 year contestable period expires. If policyholder does not comply, company will rescind the policy.

Asked on June 15, 2013 under Insurance Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Yes, they may request substantiation of finances if there is any reason to suspect that the finances were not reported or described properly in the first place, and so the policy should not have been issued. Assuming that the policyholder's finances were properly stated, there is no reason--other than inconvenience--to not comply; and if they were not properly stated in applying for the policy, the policyholder may wish to speak with an attorney, since it is possible he or she may have committed insurance fraud.


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