What is a "contestability period" in a life insurance policy?

A "contestability period" in a life insurance policy refers to the duration during which the insurer has the right to contest or deny a claim based on misrepresentation or omission of information in the application. This typically lasts for the first two years after the policy is issued. During this time, if the insurer discovers that a policyholder misrepresented information when applying for coverage, they can refuse to pay claims. This period is critical because it protects the insurer from fraudulent applications while also encouraging applicants to provide honest and accurate information.

The other options do not accurately reflect the concept of a contestability period. The first option incorrectly suggests that the policy cannot be canceled after this period, which is not true, as policies may still be subject to cancellation for various reasons apart from contestability. The third option inaccurately states that a contestability period involves free coverage, while the fourth option misinterprets it as a review period for policyholders, which does not relate to claims contestation.