Which statements concerning the incontestable clause in life insurance contracts are correct?

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

Answer: (C)

The incontestability clause protects a life insurance contract after a certain period has passed. Once the policy has been in force for the standard contestability period (typically two years), the insurer generally cannot contest the contract or deny a claim based on statements made in the application, meaning innocent misstatements won’t void coverage. This gives beneficiaries assurance that coverage will be paid after that period, subject to the policy’s terms.

However, this protection is not absolute. The insurer can still contest in cases of fraud or concealment, and misstatements of age (and sometimes other critical facts) may lead to adjustments in benefits rather than a complete denial after the period. Because the statements in the item reflect these typical features—the period after which contestability ends and the continued possibility of contesting for fraud or material misstatements—both statements are correct.