Incontestability Clause

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.



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