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Life Insurance Glossary: Terms To Know

Contestability/Constestable Period

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You will generally find a contestable period in individual policies and group policies which ask medical questions.

The contestable period refers to an initial period starting with the date of issue of the policy during which the insurance company can contest the validity of the policy. During a contestable period, a life insurance company only has to prove that a fact in the application was wrong. In general, in this case, intent does not matter. For example, if you were required to provide medical information in order to obtain the insurance and you lied on about your medical condition on the application: the insurance company can cancel the policy if it discovers the lie during the contestable period.

Contestable periods are generally applicable for two years from the date of issue. Contestable periods may also be applicable for an additional two years:

  • From the date that you reinstate coverage that lapsed because you didn't pay the premium on time or
  • From the date that you convert coverage, say from group to individual. Some states prohibit an insurance company from restarting the contestable period as a result of a conversion, though they do permit continuation of any remaining time that had not yet passed from the date of issue of the original policy.

In theory, an insurance company cannot contest the validity of a life insurance policy after the contestable period ends. We say "in theory" because in some states the insurance company can argue that there was fraud, which means there never was an agreement at all. In the states which allow this argument, the insurance company must prove that a fact was wrong and that there was an intent to deceive. This can be very difficult when the person whose intent is being questions is no longer with us.


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