Thursday, September 22, 2005
The statutory two-year incontestability provision of Florida life insurance law means an insurer must pay out the benefits even if the policyholder hired an impostor to impersonate him during the required medical exam, according to a ruling from the U.S. Court of Appeals for the 11th Circuit.
Under the law, a life insurance policy becomes incontestable if it’s in force for two years before the policyholder’s death. Allstate Insurance claimed that policyholder John Miller had someone else pretend to be him during the medical exam, but the district court granted summary judgment on that contention to the beneficiaries.
The two-year period, said the court, is the equivalent of a statute of limitations:
Just as Florida courts would dismiss an otherwise valid action once the statute of limitations on that claim had run, Florida's appellate courts have uniformly held that once the incontestability clause becomes effective, insurers are barred from attempting to rescind or cancel the insurance policy based on allegations that the insured engaged in fraud or misrepresentation.