What Is Incontestability Clause?
A protection for policyholders that prevents insurers from denying claims based on misstatements after the contestability period expires, except for fraud. This clause ensures policies remain valid as long as premiums are paid.
Incontestability Clause across 3 exams
Incontestability Clause appears on the following exams. Each defines it in the context candidates are tested on:
- Life Insurance
- A protection for policyholders that prevents insurers from denying claims based on misstatements after the contestability period expires, except for fraud. This clause ensures policies remain valid as long as premiums are paid.
- Life-Only Insurance
- A provision barring the insurer from voiding a policy over misstatements or concealment once it has been in force for two years, except in cases of nonpayment of premium.
- Health-Only Insurance
- A policy provision that prevents the insurer from denying claims based on misstatements in the application after a set time period (usually 2 years). It protects the insured from challenges after the contestability period ends.