Incontestability Clause

AAA

DEFINITION of 'Incontestability Clause'

A clause in most life insurance policies that prevents the provider from voiding coverage due to a misstatement by the insured after a specific amount of time has passed. A typical incontestability clause specifies that a contract will not be voidable after two or three years due to a misstatement.

INVESTOPEDIA EXPLAINS 'Incontestability Clause'

Incontestability clauses help protect insured people from firms who may try to avoid paying benefits in the event of a claim. While this provision benefits the insured, one must note that it does not protect against outright fraud. Lying to an insurance company with an intention to deceive can result in the cancellation of coverage or even criminal charges.

RELATED TERMS
  1. Military Clause

    A clause found in most residential leases that permits military ...
  2. Variable Life Insurance Policy

    A form of permanent life insurance, Variable life insurance provides ...
  3. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an ...
  4. Term Life Insurance

    A policy with a set duration limit on the coverage period. Once ...
  5. Insurance

    A contract (policy) in which an individual or entity receives ...
  6. Provision

    A legal clause or condition contained within a contract that ...
Related Articles
  1. Insurance

    Understanding Your Insurance Contract

  2. Insurance

    15 Insurance Policies You Don't Need

  3. Retirement

    Life Insurance: How To Get the Most ...

  4. Home & Auto

    Life Insurance Clauses Determine Your ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center