Incontestability Clause

An incontestable clause is a provision in a life insurance policy that states that the policy cannot be contested after a certain period of time, usually two years. This means that the insurance company cannot deny the claim for any reason, even if the policyholder has lied on the application.

The incontestable clause is designed to protect policyholders from being denied coverage after they have already paid premiums for years. It also helps to ensure that insurance companies are more careful about who they insure, since they know that they will not be able to back out of a policy after it has been in force for a certain period of time.

There are a few exceptions to the incontestable clause. For example, if the policyholder commits fraud on the application, the insurance company can still deny the claim. Additionally, if the policyholder dies by suicide within the first two years of the policy, the insurance company may be able to deny the claim.

The incontestable clause is an important part of life insurance policies. It helps to protect policyholders from being denied coverage after they have already paid premiums for years. It also helps to ensure that insurance companies are more careful about who they insure.