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Incontestability Clause
[definition]
What Does Incontestability Clause Mean?

Incontestability clause refers to a stipulation used in a health- or life-insurance contract according to which the insurance company cannot make the policy the subject of dispute after a predefined period of time. One should know that the term after which the incontestability clause comes into force is called the contestability period.

This clause type stops the insurance underwriter from nullifying insurance because of an incorrect statement of the insured noticed only after the contestability period. Generally speaking, a classical incontestability clause states explicitly that an agreement is not capable of being adjudged void because of falsity after a period of two-three years.

Incontestability Clause Explained

An incontestability clause is intended to defend those people whose life is insured and who face not being paid in case a claim becomes valid under the insurance policy. However, besides taking advantage of this service an insured must be careful of certain strict restrictions. Incontestability clauses do not maintain their status in case of a direct fraudulence. Deceiving the insurer may lead to the nullification of the insurance contract or even to stricter consequences.
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