Generally a life insurance company will have to pay a death benefit once the contestability period of two years has passed.
Policies may have certain exclusions, such as suicide or death while committing a felony, but these will appear in the contract language.
Even if it turns out that an insured person lied about smoking or their age, the insurance company will have to pay a death benefit that will simply be reduced to account for the premiums paid and what should have been the correct risk rating for the person. Most life insurance will pay out a death claim if death occurs for any reason after the contestability period has passed.
The purpose of the contestability period is to allow life insurance companies to prove that a person fraudulently represented themselves on the application and hid important information from underwriters. Contesting a claim mean paying legal fees, generally, and many life insurers have no interest in spending money on taking beneficiaries to court. This hurts their reputation and decreases future sales revenue.
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