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. Alternate Beneficiary

    In a will, an alternate beneficiary is usually named in case ...
  6. Secondary Beneficiary

    A person or entity that inherits assets under a will, trust or ...
Related Articles
  1. Home & Auto

    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. Insurance

    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. Insurance

    How Life Insurance Payouts Work

    Life insurance provides peace of mind to policyholders and their loved ones.
  4. 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.
  5. Financial Advisors

    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.
  6. Retirement

    Why You Should Draft A Will

    Don't trust the courts to follow your wishes - plan the distribution of your own assets.
  7. 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. Options & Futures

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  9. 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.
  10. Retirement

    Life Insurance: How To Get the Most Out Of Your Policy

    There are many benefits to owning a life insurance policy - if you get the right one for you.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. Do beneficiaries pay taxes on life insurance?

    Learn how life insurance proceeds are generally not taxable to the beneficiary, but understand the unique situations in which ... Read Answer >>
  4. 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 >>
  5. What are the restrictions for naming a given individual as my contingent beneficiary?

    Understand what restrictions may exist, depending on your state and the policy you choose, on naming your life insurance ... Read Answer >>
  6. Can the non-spouse beneficiary of an IRA name a successor beneficiary?

    Whether the beneficiary of an individual retirement account (IRA) can name a successor beneficiary (second generation beneficiary) ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center