can a life insurance company refuse to pay out a policy?

It largely depends on the terms of the insurance contract. If for example the policy clearly excludes coverage if the insured dies from the preexisting condition within two years, there is likely no coverage. I strongly suggest you request they provide you in writing their basis for denying/delaying the claim and to set out the specific policy provision(s) they are relying. If they continue to contest the claim you will need a lawyer to carefully look at the policy and see if its provisions comply with Florida law.  You can also try filing a complaint with the state of florida, particularly if they will not give you the policy language and reason for the delay/denial. My website has a link to the State of Florida website for filing a complaint and seeking relief (if you can not find it on your own). If you have additional quesitons, or can provide me the questionable language, feel free to contact contact me in reply to this post, or email me. My information is located within the lawyers.com attorney listing.