Incontestability Clauses in Life Insurance: What They Are, How They Work, and Examples


Understanding the incontestability clause in life insurance policies is vital for both policyholders and beneficiaries. This comprehensive guide delves into the intricacies of this clause, exploring its purpose, exceptions, and the protection it offers. Discover how it safeguards consumers from unintentional errors, its historical context, and the legal aspects surrounding it. Unravel the complexities and benefits of incontestability clauses, ensuring you navigate the world of life insurance with confidence and clarity.

What is an incontestability clause?

An incontestability clause is a crucial element embedded in most life insurance policies, designed to protect the interests of policyholders and beneficiaries. This clause serves as a shield against the insurance provider voiding coverage due to misstatements made by the insured after a specified period has lapsed, commonly set at two or three years.

How an incontestability clause works

The incontestability clause stands as a robust safeguard for policyholders and beneficiaries, providing a unique advantage in the realm of insurance contracts. While conventional contract rules allow the cancellation of agreements based on false or incomplete information, the incontestability clause disrupts this norm. It explicitly forbids insurance companies from voiding coverage based on misstatements after the stipulated period.

The contestability period begins ticking the moment a life insurance policy is purchased. If, after two or three years, the insurance company has not identified any errors in the original application, the benefits become practically assured. Even within this period, rescinding a policy is a challenging process for the insurance company, often requiring legal proceedings to nullify a contract.

Three common exceptions to the incontestability clause

Despite the general protective nature of incontestability clauses, it’s essential to be aware of certain exceptions that may apply:

  • Misstatement of age or gender: In several states, if the insured person provides inaccurate information regarding their age or gender, the insurance company may not void the policy. However, they retain the right to adjust death benefits to reflect the policyholder’s accurate status.
  • Time limit on contestability period: Certain states allow insurance companies to include a provision stating that the contestability period must be completed within the insured’s lifetime. If the policyholder passes away before this period concludes, the insurance company can refuse to pay benefits.
  • Deliberate fraud: In some states, the insurance company has the authority to void a policy if deliberate fraud is proven. This underscores the importance of providing accurate and truthful information during the application process.

How incontestability clauses help consumers

Applying for life insurance can be a meticulous process, often involving a comprehensive review of the applicant’s medical history. Errors in this information can potentially lead to the denial of life insurance benefits later on. The incontestability clause serves as a consumer protection measure, ensuring that honest mistakes made during the application process do not become grounds for voiding coverage.

Reputable insurance companies introduced the incontestability clause in the late 1800s with the goal of building consumer trust. By committing to pay full benefits after the policy has been in place for two or three years, even in the presence of errors in the original application, these companies sought to enhance the industry’s reputation. This effort proved successful, prompting state governments in the early 20th century to enact laws mandating the inclusion of incontestability clauses in life insurance policies.

Today, the immediate commencement of the contestability period upon the purchase of a life insurance policy ensures that, after two or three years, the benefits are secured if no errors are found. Even within this period, the process of rescinding a policy is not straightforward for insurance companies. Most state laws mandate that they file a lawsuit in court to nullify a contract, emphasizing the consumer protection aspect of incontestability clauses.


Here is a list of the benefits and drawbacks to consider.

  • Protects policyholders from coverage voiding after the contestability period
  • Builds consumer trust and confidence in the insurance industry
  • Assures benefits if no errors are found within the specified time
  • Does not protect against intentional fraud
  • Exceptions exist, such as misstatement of age or gender
  • Challenging for the insurance company to rescind a policy even within the contestability period

Frequently asked questions

Is the contestability period the same for all life insurance policies?

Yes, the contestability period is a standard feature in most life insurance policies, typically set at two or three years.

Can an insurance company void a policy based on any misstatement during the contestability period?

No, there are specific exceptions outlined in the incontestability clause. Misstatement of age or gender, time limits on contestability, and deliberate fraud are some examples.

How does the incontestability clause impact the application process?

The clause provides a safeguard for applicants, assuring them that honest mistakes made during the application process will not be used to void coverage after the contestability period.

What happens if deliberate fraud is proven after the contestability period?

If deliberate fraud is proven, the insurance company may have the authority to void the policy, emphasizing the importance of providing accurate information.

Key takeaways

  • Incontestability clauses prevent insurance companies from voiding coverage based on misstatements after a specified period.
  • Exceptions include misstatement of age or gender, time limits on contestability, and deliberate fraud.
  • These clauses were introduced in the late 1800s to build consumer trust and confidence in the insurance industry.
  • The contestability period, typically set at two or three years, assures benefits if no errors are found.
View Article Sources
  1. The Incontestability Clause in Life Insurance Policies – West Virginia University
  2. AIDS and the Incontestability Clause – University of North Dakota
  3. The Incontestability Clause – Chicago-Kent College of Law
  4. A New Parent’s Guide to Life Insurance – SuperMoney