Can the insurer or plan cancel or rescind at any time?

Get Legal Help Today

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jun 19, 2018

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Generally state law and the policy itself provide that the insurer has only 2 years from the date of application to rescind. If discovery of the omission or misrepresentation occurs after the passage of the 2 year period of “contestability” the insurer is generally out of luck and can not cancel the policy. After that, an insurer may only be able to contest a claim on the basis of actual, intentional fraud on the part of the policyholder, and even that may be severely limited.

Because some insurers engaged in “post-claim underwriting“, a practice in which the insurer would write a policy and take the premium, and only after a claim was submitted look to “find a way out of it”, many states have statutes which prohibit “post claims underwriting.” In those states an insurer or plan cannot rescind or cancel a policy once an insured has filed a claim for benefits unless the insurer or plan can prove intentional fraud.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption