Page 23 - Life Assurance

rs’ during the insured’s lifetime. After the
policy has been in force for two years during the
insured’s lifetime, the insurer cannot later
contest a death claim on the basis of a material
misrepresentation, concealment, or fraud when
the policy was first issued. The insurer has two
years in which to discover any irregularities in
the contract.

The purpose of the incontestable clause is
to protect the beneficiary if the insurer tries to
deny payment of the claim years after the policy
was first issued.

The incontestable clause is normally effective
against fraud. If the insured makes a fraudulent
misstatement to obtain the insurance, the company
has two years to detect the fraud. Otherwise, the
death claim must be paid.

4- Suicide clause:

Most life insurance policies contain a
suicide clause. The suicide clause states that if
the insured commits suicide within two years
after the policy is issued, the face amount of
insurance will not be paid, there is only a refund
of the premiums paid. In some life insurance
policies suicide, is excluded for only one year.

In legal terms, death is normally considered an
unintentional act because of the strong instinct of

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