Incontestability Provision 不可異議條款

Meaning and Purpose 條款的意思及目的

Under utmost good faith, an insurer can generally avoid a policy if the applicant failed to disclose a material fact or made a misrepresentation. Without a time limit, a policyholder who had paid premiums for many years could still lose cover because of statements made at application. The incontestability provision is the policy term that puts a time limit on this right.

The provision serves both sides. The insurer has a reasonable period to investigate the application, and after that the policyholder and beneficiaries have certainty that old answers will not be reopened. It also spares beneficiaries a dispute after the life insured has died and can no longer explain those answers.

The provision does not encourage concealment. The applicant must still meet the duty of disclosure; the provision only limits the remedy available to the insurer once the stated period has ended.

How the Contestable Period Works 可異議期如何計算

The contestable period is usually two years, normally running from the policy's issue date or the effective date stated in the policy. The exact calculation depends on the policy wording.

The key point is that the policy must remain in force for the whole period during the life insured's lifetime. If the life insured dies within two years, this condition cannot be met. The insurer can still raise non-disclosure or misrepresentation even if the claim is made after the two years have passed.

When a lapsed policy is reinstated, a fresh contestable period usually applies to statements made in the reinstatement application. During that period, the insurer may contest the policy on the ground of non-disclosure or misrepresentation in that application.

What the Provision Does Not Affect 條款不影響的事項

Fraud: many policies expressly preserve the insurer's rights in cases of fraud. After the period ends, the protection therefore generally covers only innocent or negligent non-disclosure and misrepresentation, and fraud is dealt with according to the policy wording.

Premium payment: the provision does not remove the duty to pay premiums. If a policy lapses for non-payment, the insurer is not disputing the policy's original validity, so the provision does not stop the lapse.

Scope of cover: the provision concerns whether the policy is valid, and it does not widen the cover. An insurer that declines a claim outside the cover under an exclusion, such as a suicide clause, or a benefit condition is not contesting the policy. Some policies treat riders differently, so the wording must be checked.

Misstatement of age: this is handled separately by the misstatement of age provision. Even after the contestable period, the insurer can adjust the benefits to reflect the correct age, rather than avoiding the policy.