Illinois Health Insurance Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

The Incontestability Clause restricts an insurance company from contesting a policy after two years of the policy being in effect. This means that after the initial two-year period since the policy inception, the insurer cannot challenge the validity of the policy based on issues that may have existed prior to or at the time of policy issuance. This clause is designed to provide certainty and peace of mind to the policyholder after a reasonable period has passed.

Options A, B, and D are incorrect:

A. Before the policy is issued - The Incontestability Clause comes into effect after the policy has been issued, not prior to issuance.

B. Within the first year of policy issuance - The Incontestability Clause typically extends beyond just the first year and usually becomes effective after a specific period, commonly after two years.

D. Only in the case of proven fraud - The Incontestability Clause applies to more than just cases of proven fraud; it applies to contesting the policy based on any grounds after the specified period has elapsed.