Under incontestability, which statement is true about misstatements in a life policy?

• A. Misstatements may be used to void the policy prior to the incontestability period; after the period, misstatements cannot void except for fraud.
• B. Misstatements can void the policy even after the incontestability period.
• C. Misstatements can void policy only if there is no fraud.
• D. Fraud has no effect on voiding policy.

Answer: (A)

Incontestability protects the policy after it has been in force for a certain period. Misstatements made in the application can be grounds to void the policy if discovered during that contestability window. Once that period has passed, misstatements generally can’t void the policy; the contract stands as issued, with one important exception: fraud. If the misstatement was fraud, the insurer can still void the policy regardless of timing. So the statement that misstatements may be used to void before the contestability period, but after the period they cannot void except for fraud, is the correct understanding.