AD Banker Comprehensive Practice Exam

After how long are policies typically considered incontestable?

1. 2 years

2. 3 months

3. 6 months

4. 9 months

The correct answer is: 2 years

Life insurance policies are typically considered incontestable after a period of two years. This means that after this duration, the insurance company cannot contest the validity of the policy or deny a claim based on misstatements or omissions made in the application, except in cases of fraud. This provision is intended to provide policyholders with greater security and peace of mind, knowing that once the contestability period has passed, their coverage is solidified. The specific timeframe is designed to prevent insurance companies from indefinitely inspecting the truthfulness of claims, thus encouraging consumers to obtain coverage without fear that their policy could be voided simply due to minor misunderstandings or inaccuracies that may have occurred during the application process. The other options suggest much shorter periods, which do not align with industry standards for incontestability, as they would undermine the purpose of the period designed to protect insured individuals.