Time frame of usually 2 years in which an insurance company may investigate the validity of a life insurance application and cancel the policy.
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Also known as an “incontestable clause” it is the period (usually after 2 years) that a life, disability, or health insurer cannot void the contract even if the insured obtained the coverage through fraud or misrepresentation.For example, suppose an insured states that he does not use tobacco when applying for a life insurance policy when he does, in fact, smoke a pack of cigarettes a day. If he dies within the first 2 years, the insurance company can deny the claim because of the misrepresentation. (Premiums paid would be returned). However, after 2 years, the company cannot void the contract even if it finds out about the lie. (See Suicide Clause).