During which period can an insurance company deny claims based on the insured’s misrepresentation?

The contestability period is the specific time frame during which an insurance company has the right to deny claims on the basis of misrepresentation in the application for coverage. This period typically lasts for two years from the policy's effective date. Within this time, if the insurer discovers that the insured provided false information or omitted critical details, it can potentially deny a claim or void the policy altogether.

Understanding this concept is important because it underlines the significance of honest and accurate disclosures when obtaining life insurance. After the contestability period expires, the insurer generally cannot contest the validity of the policy or deny a claim based on misrepresentation, provided the misrepresentation is not material or fraudulent.

The other options refer to different aspects of life insurance policies. The grace period allows policyholders a specified time to make premium payments without losing coverage. The free look period allows a policyholder to review a policy after issuance and cancel it for a full refund if unsatisfied, while the elimination period pertains to long-term disability insurance, where benefits are not payable until after a specified period following the onset of the disability.