How long can an insurance company contest a health insurance policy?

The correct answer is two years because, under Maryland law, an insurance company has a period of two years from the date of issuance to contest the validity of a health insurance policy. This provision is designed to provide stability and assurance to policyholders, preventing insurers from arbitrarily denying coverage after a considerable amount of time has passed.

If an insurance company believes there is a valid reason to contest a policy—for instance, due to fraudulent information or misstatements during the application process—this time frame limits their ability to do so, encouraging prompt investigation and resolution of claims. The two-year period is also in line with other states' regulations, reflecting a balance between the rights of the insurance company to safeguard against fraud and the rights of consumers to have reliable, ongoing coverage.

The other time frames offered, such as one year, three years, or five years, do not align with Maryland's legal standards regarding the contestability of health insurance policies, making them incorrect options in this context.