Feb. 13, 2007

Four years ago I bought a life insurance policy. I realize now that I made a couple of mistakes on the application, but my policy has an incontestable clause of two years. If I were to die could the insurer still deny the claim because of the wrong information on my application?

John, Oregon

Dear John,

According to the American Council of Life Insurers (ACLI), the incontestable clause in your insurance policy does not provide your beneficiaries with ironclad protection from inaccurate information on a life insurance application.

If the mistakes you made constitute a "material misrepresentation" — failing to disclose a medical condition or using a false Social Security number, for example — your insurer could take a number of actions, up to and including denying a claim on the policy.

If a life insurer discovers a material misrepresentation on an insurance application, it can request additional information to reunderwrite the policy or it could go as far as to cancel the policy with a refund of the premiums paid, contest a claim for the death benefit, or contact state fraud investigators.

If you are not sure whether your mistakes could be a material misrepresentation or fraud, you should contact your life insurance agent, the insurer, or the department of insurance in your state to determine what you should do.

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Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.