Delayed or Denied Claims: Contestability and Your Options

Life insurance claims don't always go smoothly. Some stall, and some are denied. When that happens, beneficiaries are often grieving, unfamiliar with the policy and unsure whether the insurer is within its rights.

Knowing the common reasons for delays and denials, especially the contestable period, helps you ask the right questions and decide whether to push back. This guide covers individual policies and coverage through an employer.

This is general information, not legal or insurance advice. Policy wording and state law control the outcome. If a large claim is denied, consider talking with a licensed attorney, and remember that your state insurance department can investigate complaints for free.

Why claims slow down

Some delay is routine. The insurer needs proof of death, a completed claim form from each beneficiary and confirmation of who is entitled to the money. The New York Department of Financial Services notes that insurers may require additional information or paperwork before paying.

State law can limit how long routine claims take. The Texas Department of Insurance's life insurance guide (updated December 2025), for example, says that in Texas, companies must pay within two months after getting proof of death and verifying the beneficiary, but that payment might take longer if the insured died during the policy's contestable period.

Other things that can slow a claim include an unclear or outdated beneficiary designation, a beneficiary who is a minor and needs a court-appointed guardian, or competing claims from family members.

The contestable period

Insurers decide whether to issue a policy, and at what price, based on the answers in the application. The incontestability provision limits how long they can go back and challenge those answers. The NAIC glossary defines it as a provision limiting the time within which the insurer has the legal right to void the contract on grounds of material misrepresentation in the application.

The Texas Department of Insurance guide (updated December 2025) explains how this works in Texas:

• Texas life insurance policies have a two-year contestable period.
• If the insured dies within that period, the company may review the application. If it learns the information was wrong or something was not disclosed, it can deny payment, even if the wrong information was unrelated to the cause of death or was given by mistake.
• If the company denies payment for this reason, it must return the premiums to the beneficiary.
• Once the policy has been in effect for more than two years, the guide says the company must pay regardless of the cause of death.
• A lapsed policy that is later reinstated gets a new contestable period, and replacing a policy with a new one starts the period over.

Washington's Office of the Insurance Commissioner gives a concrete example: if a claim is filed during the first two years, the insurer will investigate whether the policyholder left out important information, such as a recent cancer diagnosis, and if so will likely deny the claim regardless of intent. The exact rules depend on your state and your policy, so read the incontestability clause in the contract.

Other common reasons for denial

Exclusions. Washington's regulator lists exclusions a policy can include, such as death due to war, military service, suicide within two years of the policy issue date (which it notes does not apply to group life policies), or an airplane accident under conditions specified in the policy. The Texas guide similarly says that in Texas, companies usually won't pay if the death is a suicide during the first two years, but must return the premiums. If you or someone you know is struggling, call or text 988.

Lapse. If premiums stopped, coverage may have ended. The Texas guide (updated December 2025) says most Texas policies have a 31-day grace period after the due date; if the insured dies during the grace period, the beneficiary receives the death benefit minus the premium owed. After the grace period, the policy lapses and no benefit is paid.

Beneficiary questions. The New York Department of Financial Services notes that policy proceeds are payable to the beneficiary of record, so a claim from someone who is not named in the insurer's records may be refused even if a will or a family understanding says otherwise.

If your claim is delayed

• Ask the insurer, in writing, what is outstanding and when it expects to decide.
• Keep a record of every letter, email and call, with dates and names. The NAIC recommends this record if you later need to file a complaint.
• Ask about interest. Some states require interest on delayed death benefits. Texas requires interest on individual policies from the time proof of death was received, and Washington's regulator says (as of 2026) that insurers there must pay interest from the date of death.

If your claim is denied

Ask for the denial and the specific reasons in writing, along with a copy of the policy and the application the insurer is relying on. Compare the reasons to the policy language.

If the coverage came through a private employer's benefit plan, the federal Employee Retirement Income Security Act (ERISA) claims rules may apply. Under the Department of Labor's claims procedure regulation, 29 CFR 2560.503-1 (as in effect in 2026), a plan generally must:

• Decide a claim within 90 days of receiving it, with one extension of up to 90 more days if it notifies you of special circumstances.
• Give you a written denial that states the specific reasons, refers to the plan provisions it relied on, describes any additional information needed to complete the claim, and explains the review procedures.
• Give you at least 60 days after a denial to appeal.
• Decide the appeal within 60 days of your request, with one extension of up to 60 more days for special circumstances.

The deadline to appeal matters: missing it can limit your options later. For questions about an employer plan, the Department of Labor's Employee Benefits Security Administration has benefits advisors you can reach through Ask EBSA or at 1-866-444-3272.

Complain to your state insurance department

If you cannot resolve the problem with the insurer, contact your state insurance department. The NAIC says state departments can investigate complaints for free, including unfair claim delays or denials and failure to honor a policy. Gather your policy number, documents and communication records; write a factual account with dates; use the policy's own language; and state the outcome you want. The department forwards the complaint to the insurer, which must respond, and if the department finds the insurer acted improperly, it can require the company to fix the problem. The NAIC also notes that an insurer cannot discriminate against you for filing a complaint.

Key takeaways

• Routine claims follow state deadlines; deaths within the contestable period, often two years, can take longer.
• During that period an insurer can deny a claim over a material misstatement on the application, even an innocent one, and generally must refund premiums.
• Exclusions and lapses are other common reasons for denial; read the policy's exact wording.
• Get every denial in writing, and for employer plans, note the appeal deadline under ERISA rules.
• Your state insurance department investigates claim complaints for free.

Sources

• Texas Department of Insurance, Life insurance guide (updated December 12, 2025)
• Washington Office of the Insurance Commissioner, Filing a life insurance claim
• National Association of Insurance Commissioners, Glossary of Insurance Terms
• National Association of Insurance Commissioners, How to File a Complaint
• Electronic Code of Federal Regulations, 29 CFR 2560.503-1, Claims procedure
• U.S. Department of Labor, Ask EBSA
• New York Department of Financial Services, Lost Policy Finder