AD Banker Comprehensive Practice Exam

After how long is a life insurance policy incontestable, except for nonpayment of premiums?

1. 1 year

2. 2 years

3. 3 months

4. 6 months

The correct answer is: 2 years

A life insurance policy becomes incontestable after a specified period has elapsed, which is generally two years from the date of issue. This means that the insurer cannot contest or deny a claim based on misrepresentations or omissions made by the insured in the application after this two-year period has passed, as long as the premiums have been paid. This provision is designed to provide stability and certainty to policyholders, allowing them to rely on their insurance coverage without the fear of the insurer disputing claims long after the policy was issued. The two-year incontestability clause is standard across most life insurance policies, with any fraud or intentional misrepresentation being the notable exception that permits contesting a claim beyond that period. The other timeframes listed in the options do not align with this standard practice in the life insurance industry, which is why they do not serve as the correct answer in this context.