How Long Does It Take To Pay Out On A Contested Life Insurance Policy? 
The reason the claim is being contested is because the carrier has a right , and a duty to its policyholders , to make sure that the application was accurate and information it contains did n't materially misrepresent the health or history of the insured . People do resort to different moral standards when faced with the end of life without adequate financial resources for their family members . And , agents may not provide the best guidance while assisting in application completion . Once submitted , however , underwriting a new application is usually thorough and methodical . Within two years though , when a claim occurs within the contestable period , there are enough reasonable questions about the health and condition of the insured that these issues are revisited as a matter of due diligence . That is why the contestable period exists . Claims laws in every state do not give the carrier the discretion to drag their feet and they must generally act on the claim within a reasonable period after it is presented . My experience is that the benefit is paid within 60-90 days or sooner if the application was accurate and all known issues were admitted and acknowledged on the application -LRB- when the cause of death is not in dispute -RRB- . Nevertheless , it is a difficult time to be asked to wait for the policy proceeds . It has been my experience that the delay is usually reasonable and almost always results in a death benefit being paid . When challenges are found to the veracity of the application , it becomes more complicated and these increase the chance that all that will be paid is the premium and interest and not the life insurance benefit . That is a rare event , on average . However , insurance companies can not be asked to pay for claims on individuals when their condition would not have been accepted and a policy issued . To conceal material fact is a reason any contract can be voided and life insurance is just another form of contract , in the end . 