incontestable clause in life insurance

The Incontestable Clause in a Life Insurance policy very beneficial to those insured, rather than the insurance company. It forces insurance companies to pay some clients who have provided false information when creating their policy with the company. This clause states that, after the policy has been in effect for a specified period, it may not be contested. This period is usually two years, and when it is over the life insurance policy may not be voided by the insurer, even if false information was provided when the policy was created with the insured party.

Fast Facts

The insurance company can sometimes still recalculate payments according to more accurate health information.
In essence, this is a legal form of insurance fraud.

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