Which provision prevents an insurer from denying a claim due to misstatements after the policy has been in force for two years?

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Multiple Choice

Which provision prevents an insurer from denying a claim due to misstatements after the policy has been in force for two years?

Incontestability is the provision at work here. Once a life insurance policy has been in force for a set period (usually two years), the insurer cannot deny a claim or challenge the policy based on misstatements the applicant made in the application. This protects the insured and beneficiaries by ensuring the contract isn’t overturned years after it was issued due to minor or innocent misstatements. The main exception is fraud—if fraud is involved, the insurer can still contest. Premium nonpayment can also lead to a lapse regardless of incontestability.

Incontestability is the provision at work here. Once a life insurance policy has been in force for a set period (usually two years), the insurer cannot deny a claim or challenge the policy based on misstatements the applicant made in the application. This protects the insured and beneficiaries by ensuring the contract isn’t overturned years after it was issued due to minor or innocent misstatements. The main exception is fraud—if fraud is involved, the insurer can still contest. Premium nonpayment can also lead to a lapse regardless of incontestability.

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