In short
The contestability period is the window, typically the first two years after a policy is issued, during which the insurer can review the application if you die and contest the claim over a material misstatement. Inside it, a claim is investigated before it is paid, and a serious misstatement can lead to an adjusted benefit or a voided policy with the premiums refunded. After it, most policies pay regardless of application errors, with fraud as the main exception in some states. Honest answers make the whole clause irrelevant.
Key takeaways
- Most policies are contestable for two years from the issue date. State law sets the maximum; a few states and some policies use one year, and your policy states yours.
- Inside the window, the insurer compares your application with your records. A material misstatement, such as a hidden diagnosis, tobacco use or a risky hobby, can void the policy; an honest error that would not have changed the decision typically cannot.
- The suicide clause is separate: for a death by suicide in the first two years, most policies refund the premiums instead of paying the benefit.
- After the window closes, claims are generally paid even if the application had mistakes. Some states still allow a challenge for outright fraud.
- Reinstating a lapsed policy or buying a new one starts a new clock, which is a reason to keep the policy you have in force.
Every term life policy in the United States carries an incontestability clause. For a short period after the policy is issued, typically two years, the insurer may contest a claim if the application turns out not to have been truthful. After that, the policy is treated as valid and claims are paid, mistakes and all.
It works much the same on most US term life policies, including Nectar Term; where the issuing insurer's wording differs, the details are printed in your policy. In one sentence: answer honestly and the contestability period never affects you.
What is the contestability period on a life insurance policy?
The contestability period starts on the issue date and runs for the length stated in the policy. State law sets the maximum, and nearly every state caps it at two years; a few states and some policies use one year. The clause is standard wording: once the policy has been in force for two years during your lifetime, the insurer cannot contest it, except for nonpayment of premiums.
Two details matter.
- "During your lifetime." The clock only runs while you are alive. If you die 18 months in, the claim can be reviewed even if it is filed after the two-year mark.
- "Contest." The insurer cannot deny a claim for any reason it likes. It can rescind the policy, treating it as if it never existed, only for a misstatement material to its decision to issue it.
The clause protects both sides: you get a policy that cannot be picked apart decades later over a forgotten doctor's visit, and the insurer gets a short period to catch someone who hid a serious diagnosis, which keeps prices lower for everyone else.
What can the insurer investigate during the contestability period?
If a claim arrives inside the window, the insurer typically opens a contestable claim review: it gathers medical records, prescription history, the Medical Information Bureau file and driving records, and compares them with your answers, looking for:
- Undisclosed conditions. A diagnosis, a symptom under investigation, a hospital stay, or a medication left off the form.
- Tobacco and nicotine. Any use within the period the application asked about, including vaping and nicotine pouches. Tobacco rates are typically two to two and a half times non-tobacco rates, a material difference.
- Hazardous activities. Private aviation, scuba diving, climbing, racing and similar pursuits.
- Other answers. Foreign travel, a criminal record, a suspended license, other life insurance applied for, and your age or sex.
A misstatement is generally material if the insurer, knowing the truth, would have declined the application, charged more or issued a different policy. Most states do not require that it was deliberate; an innocent omission can still be material. A few require intent to deceive, or that the undisclosed fact contributed to the death. The standard is set by the state where the policy was issued.
Note what is not on the list: a condition you disclosed. If you told us about your blood pressure and the underwriter priced it, the insurer cannot later use it against the claim. Disclosure starts with the Nectar Term application: answer every health question as if the underwriter already has your records; for most applicants they are pulled electronically, so the underwriter does.
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What happens to a claim during the contestability period?
The claim is investigated before it is paid, which adds weeks or sometimes months while records are gathered; the beneficiary signs authorizations so the insurer can request them. Then one of three things typically happens:
- The claim is paid in full. The application checks out, or the errors were not material: the usual outcome for an honest application.
- The benefit is adjusted. Standard policy language lets the insurer correct a misstated age or sex at any time, paying what the premium would have bought at the true figures. Some insurers adjust tobacco misstatements the same way; others treat them as grounds for rescission. The details are printed in your policy.
- The policy is rescinded. For a material misstatement, the insurer voids the policy from the start and refunds the premiums, usually with interest. No death benefit is paid.
A beneficiary who disagrees with a rescission can appeal to the insurer, complain to the state insurance department through the NAIC, or sue; the insurer must show that the misstatement was material.
| Misstatement on the application | Typical result inside the window | Typical result after the window |
|---|---|---|
| Undisclosed diagnosis or treatment that would have changed the decision | Policy rescinded, premiums refunded | Claim generally paid |
| Undisclosed tobacco or nicotine use | Rescinded, or benefit reduced to what the premium buys at tobacco rates, depending on the policy | Claim generally paid |
| Undisclosed hazardous activity | Rescinded if it would have changed the decision; an exclusion rider for that activity, if issued, applies regardless | Claim generally paid, except a death the exclusion rider names |
| Wrong age or sex | Benefit adjusted to what the premium buys at the true age or sex | Same adjustment; no time limit |
| Honest, minor error that would not have changed the price | Claim paid | Claim paid |
| Deliberate fraud, such as a hidden terminal diagnosis or an impostor at the exam | Rescinded, premiums refunded | Varies by state: some let the insurer contest fraud at any time; many do not |
| Death by suicide | Premiums refunded under the separate suicide clause, typically two years | Claim paid |
How does the suicide clause work, and is it the same thing?
No. The suicide clause is a separate provision with its own period, also typically two years from the issue date and shorter in a few states. For a death by suicide within that period, most policies pay the beneficiary the premiums paid, not the death benefit. After it, a death by suicide is covered like any other.
The two are often confused because they share a length, but they do different jobs: the contestability clause is about what you said on the application; the suicide clause is about the cause of death and applies however perfect the application was. Both restart when a policy is replaced, one reason to think twice before swapping a policy you already have for a new one.
If you answered every question truthfully, the contestability period cannot touch your claim; it exists to catch hidden facts, not honest people. Before the free-look period ends, read the copy of your application attached to the policy and correct anything wrong.
What happens after the contestability period ends?
Once the policy has been in force for the stated period during your lifetime, the insurer can no longer contest it over misstatements on the application. A claim is generally paid even if a material condition was left off the form, and in many states even if the omission was deliberate: the clause forgives errors in exchange for certainty.
The exceptions on most policies are narrow:
- Nonpayment of premium. A lapsed policy is not a valid policy. Our guide to the grace period and lapse covers how much time you have.
- Misstatement of age or sex. The benefit is adjusted, not denied, at any time.
- Policy exclusions and riders. An exclusion written into the policy, for example for a named hazardous activity, applies for its whole life. Our guide to term life insurance riders explains which riders carry exclusions.
- Fraud, in some states. Some states allow an insurer to contest a fraudulent application at any time, and policies issued there say so; in many states the two-year clause is absolute.
- An impostor or no insurable interest. If the person who applied or took the exam was not the insured, some states treat the policy as void from the start.
Does reinstating a policy or buying a new one restart the clock?
Typically, yes.
- Reinstatement. If your policy lapses and you reinstate it, you answer new health questions, and most policies start a new contestability period for those answers, typically two years from the reinstatement date.
- A new policy. Replacing your policy, with us or anyone else, starts both clauses over from the new issue date. Weigh a replacement bought to save money against two more years of contestability.
- A coverage increase. Adding coverage that requires new evidence of insurability typically starts a new period for the added amount.
- Conversion. Converting term coverage to a permanent policy without new health questions generally does not restart the clock, because there is no new application to contest; the details are printed in the new policy, and our guide to converting term life to permanent covers when it makes sense.
The practical rule: keep the policy you have in force and the clock runs out on its own. For how a claim is filed and paid once it does, see our guide to life insurance beneficiary rules.
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Frequently asked questions
Can life insurance be denied after the two-year contestability period?
Generally not over application errors. After the period, the insurer cannot contest the policy because of what was or was not disclosed. The remaining grounds are nonpayment of premium, an exclusion written into the policy, an age or sex adjustment, and, in some states, outright fraud.
What happens if you die during the contestability period?
The insurer reviews the application against your medical and other records before paying. If the application was truthful, or the errors would not have changed the decision, the claim is paid. If a material misstatement is found, the policy can be voided and the premiums refunded.
Does the contestability period apply to accidental deaths?
Yes. The clause is about the application, not the cause of death, so a claim for an accidental death inside the window is reviewed the same way. A truthful application is paid.
Is the suicide clause the same as the contestability period?
No. The suicide clause is a separate provision, also typically two years, under which most policies refund the premiums rather than pay the death benefit for a death by suicide. After it ends, suicide is covered.
Does the contestability period start over if I reinstate my policy?
Typically yes, for the answers you give on the reinstatement application. Buying a replacement policy starts both the contestability and suicide clauses over from the new issue date.
Nectar Term policies are issued by Nectar's partner insurers, each rated A or better by A.M. Best, and serviced by Nectar. Prices in this article are estimates calibrated to published 2026 averages and are not an offer of coverage. Final rates are set during underwriting.
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