Under which of the following conditions is a life insurance policy in force beyond the contestable period valid?

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

Answer: (A)

The main concept here is the incontestability rule: after the contestable period, a life insurance policy is generally incontestable. That means the insurer cannot cancel the policy or deny a claim for misstatements in the application, unless fraud is proven. So the policy remaining in force beyond that period depends on two things: there has been no fraud in the application, and the policy has not lapsed due to nonpayment of premiums. If both conditions are satisfied, the policy stays in force and is valid after the contestable period. If either condition fails—fraud is involved or the policy has lapsed—the policy may not be in force, even after the contestable period.