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. Full Reporting Clause

    Full reporting clause is an insurance policy provision requiring ...
  5. Cancellation Provision Clause

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

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

    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. Retirement

    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. Insurance

    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. Retirement

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
RELATED FAQS
  1. 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. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  2. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ability to pay short-term and long-term obligations, also known ...
  3. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  4. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  5. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  6. Indirect Tax

    A tax that increases the price of a good so that consumers are actually paying the tax by paying more for the products. An ...
Trading Center