Life Insurance Questions and Answers
Can an insurance company rescind (retroactively cancel) a policy after a claim for benefits is made?
An insurer may attempt to rescind a life insurance policy retroactively if the death occurred within the first two years of the policy issuance. However, the insurance company can rescind a policy only when the insured made a material misrepresentation in the original application for insurance.
What is a Material Misrepresentation?
A fact, that if known to the insurance company when you first applied, would have changed its decision (1) to issue a policy to you or (2) the amount of premiums charged to issue a policy to you.
These material facts are generally found in the health history questionnaire you fill out when applying for insurance.