Key takeaway
The contestability period is usually the first two years after a life insurance policy is issued. During this time, the insurer can investigate and potentially deny a death claim if it finds material misrepresentation or fraud on the application. After two years, the insurer generally cannot contest the claim on those grounds.
What is the contestability period?
In Canada, the contestability period is typically the first two years from the policy issue date. During this period, if the insured dies, the insurer may investigate the application and medical history. If it finds material misrepresentation or fraud, it can deny the claim or reduce the benefit.
After the contestability period ends, the insurer generally cannot void the policy or deny a claim based on misrepresentation in the application — except in cases of outright fraud. This protects beneficiaries from late-stage disputes while still giving insurers a reasonable window to uncover application errors.
What counts as material misrepresentation?
Material means the information would have influenced the insurer's decision to issue the policy or set the premium. Examples include undisclosed smoking, unreported medical conditions, or incorrect family history when that history was asked. Innocent mistakes (e.g., forgetting a minor medication) may or may not be deemed material depending on the circumstances.
Intentional fraud — such as lying about a major diagnosis or identity — can be contested even beyond two years in some cases. The key is to answer every question fully and accurately at application time.
What happens if a claim is contested?
If the insurer believes there was material misrepresentation, it may deny the claim or offer to return premiums paid instead of paying the full death benefit. Beneficiaries can dispute the decision and may need legal advice. Disputes can be costly and stressful for families.
To minimize risk, keep copies of your application and any correspondence. If your health or lifestyle changes after you apply but before the policy is delivered, inform the insurer so the contract can be updated.
Why full disclosure is the only safe approach
The best way to avoid contestability issues is to disclose everything the application asks for. If you are unsure whether to include something, include it. Let the insurer decide if it matters. Omitting information to get a lower rate or faster approval can backfire catastrophically for your beneficiaries.
If you already have a policy and discover an error, contact the insurer. Depending on the situation, they may amend the policy or allow you to add a corrective statement. Do not assume that "getting away with it" for two years makes the policy safe — in serious cases, fraud can still be raised.
Frequently asked questions
How long is the contestability period in Canada?
Typically two years from the policy issue date. After that, the insurer generally cannot contest a claim based on application misrepresentation, except in cases of fraud.
Can the insurer cancel my policy during the contestability period?
They can rescind the policy (treat it as void) if they discover material misrepresentation, usually only when a claim is made or during underwriting review. They cannot cancel arbitrarily for no reason.
Does contestability apply to no-medical policies?
Yes. No-medical (simplified issue) policies also have a contestability period. The application questions are still part of the contract, and misrepresentation can be used to contest a claim within the first two years.