Question

As the beneficiary of his dad's life insurance policy, Nick tried to collect benefits when his dad died 21 months after the policy inception. What is the most likely reason that the claim could be denied?

Answer 1

The most likely reason that the claim could be denied is if the death occurred within the contestability period of the life insurance policy. It is important to provide all accurate information during the application process to avoid potential claim denials.

Step-by-step explanation:

The most likely reason that the claim could be denied is if the death occurred within the contestability period of the life insurance policy. Contesetability periods usually range from one to two years after the policy inception.

During this period, the insurance company can investigate the information provided in the application and deny the claim if there is any material misrepresentation or hidden information.

For example, if Nick's dad had a pre-existing medical condition that he did not disclose in the application, and his death was related to that condition, the insurance company may deny the claim due to the non-disclosure.

It is important to provide all accurate information during the application process to avoid potential claim denials.