Question

Jim, age 32 , purchased a $300,000 five-year renewable and convertible term insurance policy. In answering the health questions, Jim told the agent that he had not visited a doctor within the last 5 years. However, he had visited the doctor 2 months earlier. The doctor told Jim that he had a severe heart problem. Jim did not reveal this information to the agent when he applied for life insurance. Jim died 3 years after the policy was purchased. At that time, the life insurer discovered the heart ailment. Explain the extent of the insurer’s obligation, if any, with respect to payment of the death claim.

Answer 1

An incontestability clause is a clause in most life insurance policies that prevents the provider from voiding coverage due to a misstatement by the insured after a specific amount of time has passed.

Since, it has been more than 2 years that the policy has been in force during the insured lifetime . In such situations the  insurer cannot contest the death claim stating that , his illness was not disclosed at the time of taking the policy and that there was misrepresentation, concealment of facts or fraud when the policy was issued.

Th insurer is obligated to pay in full to the insured.