Contestability Period
A timeframe, typically two years from the policy's start date, during which the insurance company reserves the right to investigate and possibly deny a claim if they discover a material misrepresentation or omission on the application.
Detailed Explanation
After the contestability period ends, the insurer generally cannot deny a claim based on information provided (or not provided) on the initial application, except in cases of fraud.
Practical Example
Sarah purchased a life insurance policy and truthfully answered all the questions on the application. After the two-year contestability period passed, her beneficiaries would generally be protected from claim denial based on her initial health disclosures.
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