Suicide, Reinstatement, and Two Contestability Clocks

Probably not on the original application. The policy was issued in January 2022, so the two-year contestability period from issue ended in January 2024. Denise died in March 2024. After that date, the insurer generally cannot rescind for the 2022 nondisclosure, even though the 2020 hospitalization and suicide attempt were material. Reinstatement changes the analysis. The May 2023 reinstatement application asked about treatment or hospitalization in the past five years, and Denise again answered no. That is a new misrepresentation. Most policies restart contestability from the reinstatement date for statements made in the reinstatement application, so the insurer can contest that statement because she died about nine months after reinstatement. Materiality is the key: a 2020 suicide attempt requiring hospitalization plus ongoing escitalopram would likely have caused a decline or a rated offer, so the misstatement is probably material. If the insurer proves materiality, it may rescind the reinstatement and return premiums.

The suicide clause is a separate limitation. If the policy's reinstatement provision restarts the two-year suicide exclusion, as many policies do, the March 2024 death is within two years of the June 2023 reinstatement, so the insurer's maximum exposure is return of premiums, not the $600,000 face amount. If the policy does not restart the suicide clause on reinstatement, the original two-year period expired in January 2024 and the suicide exclusion no longer applies; then the contestability analysis controls. The beneficiary should demand the policy's reinstatement and suicide provisions in writing. The two clauses are not interchangeable: rescission voids the contract for fraud and requires return of premiums, while the suicide clause assumes a valid contract and limits the death benefit. The insurer cannot both rescind and keep the premiums, and it must tender the premiums promptly.

If rescission is valid, the beneficiary receives the premiums paid, possibly with interest as the policy or state law requires, not the $600,000. The insurer must prove a misrepresentation, that it was material, and that it relied on it. The best evidence is the underwriting guidelines showing that a 2020 suicide attempt and hospitalization would have led to a decline or different terms. If the insurer cannot prove materiality, the policy stands, and the suicide clause determines the payout: return of premium if the death is within the applicable two-year period, or the face amount if it is outside. The beneficiary should request the claim file, the reinstatement application, and the underwriting manual, and should check whether Oklahoma's incontestability statute treats reinstatement differently from original issue. A waiver or estoppel argument would require evidence that the insurer knew the 2020 records when it reinstated, which the facts do not show.