Incontestable Clause of Life Insurance
Depending on the state that you're in, this life insurance company provision will exist in insurance policies. Let's examine parts of the life insurance company provision at a time:
"This policy shall be incontestable after it has been in force for a period of two years from date of issue..."
Most of the time, when a life insurance policy is taken out on an insured party, the party does not die right away. This is a fact. However, after the insurer dies, if the insurance company has a right to contest, stating the life insurance policy is a fraud, the beneficiary does not get the death benefit, and therefore could suffer from hardships because of it.
The life insurance company cannot contest the insurance policy two or more years after it was issued, and forces the insurance company not to drag its feet when paying the death benefit to the beneficiary, who needs the funds right away.
Grace Period
Incontestable Clause
Incontestable Clause, Part 2
Incontestable Clause, Part 3
Incontestable Clause, Part 4
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