I have a term life insurance policy that was issued a few years ago. At the time, I had to complete an interview and questionnaire regarding my lifestyle and activities and complete some medical tests.
Before I dive into the stack of papers that is my policy, I have a question about how these policies generally work. If my lifestyle and activities were to change significantly, would that invalidate my existing policy or is the risk of me changing already worked into my premiums?
For example, if a policy is issued for a typical office worker who three years later decides to become a Navy SEAL, what happens?
I’ve started volunteering at my local volunteer fire company in an EMT capacity (training pending) and it occurred to me when I was at the station the other night that I hope I haven’t invalidated my policy.
I think you need to read the fine print of your specific policy, but unless you are committing fraud by misrepresenting your lifestyle I don’t think they can invalidate your policy simply because your lifestyle or career changes.
Someone more expert than I will come along soon with a more definitive answer.
Life insurance policies almost always have a contestability clause (usually 2 years, one year in some states). Once this time period is up, as long as you pay your premiums the issuer can’t invalidate the policy for any reason.
I read a legal briefing where someone found out they were HIV+, used fraud to obtain a policy (IIRC, they had a friend submit the blood sample etc…), died 3 years into the policy and the issuer had to pay up even though they conclusively proved the fraud.
Some policies are exempted from paying under certain conditions. You becoming a Navy SEAL and getting capped in Afghanistan might be one. I’d think you’d still have the policy, but it wouldn’t pay out under those circumstances.
I thought contestability period limitations were for unintentional misstatements - to protect the person who fills out the questionnaires in good faith but accidentally forgets that they sprained an ankle at age 7, then pays the premiums for years or decades assuming that they are covered. I thought that the insurer could still cancel or void if it can establish intentional fraud.
Nope, life policies are incontestable except for non-payment of premiums after two years. Kilmore Accidental death benefits would not be payable if you are serving in the military*, but the basic death benefit is always available.
Hell, you could write a note 2 years and a week after the policy was issued that said “I bought this policy using forged medical data, I lied about my job, hobbies, and interests and I have been planing my suicide since before I bought it.” and blow your brains out, the policy pays.