What Is Contestability Period? Definition

Why it matters

If the insured dies in this window, the carrier often checks the application and medical records. Honest mistakes can still cause problems if they were material. After the period, the carrier can generally contest only for fraud, depending on state law. Agents must record answers exactly, and families should never guess or hide health facts.

Source: naic.org

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Related terms

Suicide Clause: A suicide clause is a policy provision that limits the payout if the insured dies by suicide in the first one or two years. The carrier usually returns the premiums paid instead.
Misrepresentation: Misrepresentation is a false or misleading statement about a material fact, made by an applicant or by an agent. In insurance, it can affect coverage, claims, and the agent's license.
Health Questions (Knock-Out Questions): Health questions are the application questions a carrier asks about medical history. Knock-out questions are the ones where a yes answer makes the applicant ineligible for that plan.
Underwriting: Underwriting is the process a carrier uses to review an application, judge the risk, and decide whether to offer coverage and at what price. It looks at health, age, habits, and history.
Reinstatement: Reinstatement is the process of restoring a lapsed life insurance policy to active status. The owner usually pays past-due premiums and may need to show the insured is still insurable.

All 241 terms

Why it matters

Where we use this term

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