Lauer v. American Family Life Insurance

At issue is whether an insurance company can validly make the two-year contestability period in a life insurance policy begin on the policy’s issue date rather than on the date it issues a conditional receipt to the insured. We hold that it can.

BACKGROUND

The facts are undisputed. On March 23, 1997, Albert Lauer applied for life insurance with defendant, American Family Life Insurance Company. In his application, Lauer failed to disclose that he had been diagnosed with terminal lung cancer in May 1996 and had received multiple regimens of chemotherapy during 1996 and 1997. On March 26, 1997,…