Protects policyowners from having claims denied long after issuance.
Encourages insurers to investigate applications promptly.
How contestability works.
For the first two years, insurers may contest the policy for material misrepresentation.
After two years, the policy becomes incontestable, except for fraud in some jurisdictions.
Evaluate each option.
A. Cannot be contested once issued
Incorrect. The contestable period still applies.
B. Contestable only during first two years
Correct.
C. Contestable at all times
Incorrect. This would defeat the purpose of the clause.
D. Only if felony conviction
Incorrect and unrelated.
Maryland statutory relevance.
Maryland requires incontestability provisions in life insurance policies.
Conclusion.
A life insurance policy is contestable only during the first two years.
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