In which of the following cases would an insurer generally be permitted by the courts to contest the validity of a life insurance contract?

• A. I only
• B. II only
• C. Both I and II
• D. Neither I nor II

Answer: (D)

The key idea here is contestability. In life insurance, an insurer can generally challenge the validity of a policy only within a limited window after issuance (the contestability period) if the insured provided inaccurate or concealed information that is material to the risk. Typically this window lasts a couple of years. After that period, the policy is ordinarily incontestable except in cases of actual fraud.

If the scenarios described as I and II do not involve a material misrepresentation or concealment that falls within that contestability period, or if they occur outside the period or amount to nonfraudulent issues, the insurer would not be permitted to contest the contract. That’s why, in this question, neither scenario would provide a valid ground for contest, making the result the one that reflects no contestability in either described case.