Definition of "Incontestable Clause"

A provision in a policy that the insurer may not contest the validity of an insurance contract after it has been in force for two (sometimes three) years.

This clause in regular life insurance policy provides for voiding the contract of insurance for up to two years from the date of issue of the coverage if the life insured has failed to disclose important information or if there has been a misrepresentation of a material fact which would have prevented the coverage from being issued in the first place. After the end of two years from issue, a misrepresentation of smoking habits or age can still void or change the policy.

A section of a life insurance policy that states that after the policy has been in force for two years (in most states) the company cannot void the contract because of misrepresentation or concealment by the insured.