To prevent an insurance company from constantly looking back over someone's life whenever there is a claim the insurance industry adopted the incontestable period to give policyholders some degree of comfort, should there be a claim.
If there is a claim during the first two policy years, an insurance company will go to great lengths to review the claimant's past to make sure all questions were answered accurately. Should the company discover material misrepresentation by the insured, the company can alter the benefits of the policy or even cancel the policy and return all premiums.
After the first two years of a disability or life policy the company can NOT alter the benefits or cancel the policy. That is the Incontestable Period!Comments