What can an insurer do during the contestable period?

During the contestable period, which typically lasts for a specified duration after a life insurance policy is issued (usually two years), an insurer is granted the right to investigate the validity of a claim more thoroughly. This enables the insurer to ensure that the information provided by the policyholder during the application process was truthful and complete.

The purpose of this period is to protect insurers from fraud and misrepresentation. If discrepancies or material misstatements are found in the application, the insurer can choose to deny the claim. Thus, the process allows the insurer to review claims more critically based on the policyholder's initial disclosures, which is a crucial aspect for maintaining the integrity of the insurance system.

Other options do not align with the rights and limitations of insurers during the contestable period. Insurers cannot unilaterally change policy terms, accept all claims without scrutiny, or cancel policies without cause; these actions undermine the foundational principle of underwriting and the insured's rights.