Non-Contestability Clause

DEFINITION of 'Non-Contestability Clause'

1. A provision in a person's will designed to stop beneficiaries from contesting the will. The provision states that if beneficiaries try to contest the will, their potential inheritances will be effectively redistributed to other beneficiaries.

2. A provision in a life insurance policy designed to stop life insurance companies from refusing to pay out a claim to individuals because of fraud or error.

BREAKING DOWN 'Non-Contestability Clause'

1. Courts have traditionally been very reluctant to recognize non-contestability clauses in wills, and despite the presence of these clauses, courts have allowed wills to be contested.

2. Under the non-contestability clause in a life insurance policy, the life insurance company is given a one-time period in which it can contest a requested payout or claim.

RELATED TERMS
  1. Beneficiary Clause

    A beneficiary clause is a provision in a life insurance policy ...
  2. Absolute Beneficiary

    A designation of a beneficiary that can not be changed without ...
  3. Named Beneficiary

    This term refers to any beneficiary named in a will, a trust, ...
  4. Cancellation Provision Clause

    It is a provision in an insurance policy that permits an insurer ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Alternate Beneficiary

    In a will, an alternate beneficiary is usually named in case ...
Related Articles
  1. Personal Finance

    Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.
  2. Personal Finance

    Who is a Beneficiary?

    A beneficiary is a person or entity that receives funds, assets, property or other benefits from a trust, will, or life insurance policy.
  3. Personal Finance

    How Life Insurance Payouts Work

    Life insurance provides peace of mind to policyholders and their loved ones.
  4. Personal Finance

    Life Insurance: How Long Does It Take To Get Paid?

    How to file for a life insurance payout – and how long it takes to receive it. Plus, new ways to plan for payments that provide an income stream.
  5. Retirement

    Mistakes In Designating A Retirement Beneficiary

    Make sure your beneficiary designations not only reflect your intentions but also meet the requirements to be effective.
  6. Financial Advisor

    How to Handle Client Beneficiary Designations

    Beneficiary designations are a critical financial planning step that can be easily overlooked. Here's how to ensure they are properly done.
  7. ETFs & Mutual Funds

    Life Insurance

    What life insurance is: A contract with an insurance company that provides your beneficiaries with a certain amount of money when you die. Pros: Beneficiaries are safeguarded from the financial ...
  8. Retirement

    Why You Should Draft A Will

    Don't trust the courts to follow your wishes - plan the distribution of your own assets.
  9. Financial Advisor

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  10. Retirement

    Avoid This Life Insurance Policy Pitfall

    Life insurance policies need to be reviewed regularly to make sure that the beneficiary you chose some time ago is still the right choice today.
RELATED FAQS
  1. Can an insurance company deny a life insurance payout?

    If a person has only made 2 payments on a life insurance policy, is it justified for the insurance company to deny a payout? ... Read Answer >>
  2. Why do I need to turn my inherited IRA over to the estate?

    My mother had an IRA and named me as the beneficiary. I am now being told, from the executor of her will, that I need ... Read Answer >>
  3. Do beneficiaries pay taxes on life insurance?

  4. How are contingent beneficiaries informed of a payout?

    Understand how contingent beneficiaries are made aware of a policy payout, and learn what policy owners can do to ensure ... Read Answer >>
  5. What types of insurance policies have contingent beneficiaries?

    Learn what types of insurance policies use contingent beneficiaries and what conditions must be met for the contingent beneficiary ... Read Answer >>
  6. Can your life insurance company sue you?

    Find out when life insurance companies have the right to recover claims. Learn about the most common reasons why a life insurance ... Read Answer >>
Trading Center