Cheryl buys a life insurance policy with a two-year incontestable clause, and dies three years later. When she dies, her insurer discovers that she lied on application for coverage about her diabetes. What will happen?

Question

Quizplus · Accepted Answer

The insurer will pay the claim because the policy has been in force for more than two years, which is beyond the period covered by the incontestable clause. This clause prevents the insurer from contesting the policy after a certain period, typically two years, even if there was a misrepresentation or concealment of a material fact by the insured.

Cheryl Buys a Life Insurance Policy with a Two-Year Incontestable