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. Absolute Beneficiary

    A designation of a beneficiary that can not be changed without ...
  2. Incontestability Clause

    An incontestability clause is a clause that prevents providers ...
  3. Secondary Beneficiary

    A person or entity that inherits assets under a will, trust or ...
  4. Valuation Clause

    Valuation clause is a provision in some insurance policies specifying ...
  5. Hammer Clause

    A hammer clause is an insurance policy clause that allows an ...
  6. Cooperation Clause

    An insurance contract clause that requires the policyholder to ...
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. 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.
  3. 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.
  4. Financial Advisor

    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.
  5. Personal Finance

    Why Your Will Needs a 'Titanic Clause'

    If you don't have a Titanic clause in your will and disaster strikes, there's no guarantee that your intended beneficiaries will inherit your assets.
  6. Managing Wealth

    Why Your Will Should Name Designated Beneficiaries

    Find out how to make the tough decisions when it comes to choosing beneficiaries for your will.
  7. Insurance

    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.
  8. Retirement

    Breaking Down IRA Beneficiaries: Part 1

    It's important to give serious consideration to your IRA beneficiary 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 >>
  2. What are the pros and cons of naming a trust as the beneficiary of a retirement account?

    Basically, naming a trust as the beneficiary of a retirement account depends on how many people you want the account's proceeds ... Read Answer >>
Hot Definitions
  1. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  2. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  3. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
  4. Return on Investment (ROI)

    Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency ...
  5. Interest Coverage Ratio

    The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company can pay interest ...
  6. Cash Conversion Cycle - CCC

    Cash conversion cycle (CCC) is a metric that expresses the length of time, in days, that it takes for a company to convert ...
Trading Center