What is the "contestable period" in life insurance?

The contestable period in life insurance is defined as the timeframe during which the insurer has the right to investigate and potentially dispute a claim based on misrepresentations or omissions made by the policyholder in their application for coverage. This period typically lasts for two years from the policy's effective date. During this time, if the insurer discovers that the insured provided false information or failed to disclose critical health issues, they can deny a claim that arises during this period.

Understanding the contestable period is crucial for both insurers and insured individuals because it sets the groundwork for ensuring that the underwriting process is fair and transparent. It helps insurers manage risk while also providing a safeguard for the insured—after this period has lapsed, the insurer usually cannot contest a claim based on information from the initial application.