Incontestability Clause Reset

[PANate83]

Good morning -

I was hoping someone could help me with a question regarding industry standard practices pertaining to the incontestability clauses within a life insurance policies. I realize that the policies may differ carrier to carrier, but I'm hoping there's some commonality between carriers on at least some aspects of these clauses.

I am looking to make a change of beneficiary on my term-life policy but am concerned I will essentially reset the clock on my incontestability clause in doing so. Are beneficiary and/or allocation changes considered significant enough changes to reset the clause under most circumstances?

Thanks in advance.

 

[Newby]

Good morning - I was hoping someone could help me with a question regarding industry standard practices pertaining to the incontestability clauses within a life insurance policies. I realize that the policies may differ carrier to carrier, but I'm hoping there's some commonality between carriers on at least some aspects of these clauses. I am looking to make a change of beneficiary on my term-life policy but am concerned I will essentially reset the clock on my incontestability clause in doing so. Are beneficiary and/or allocation changes considered significant enough changes to reset the clause under most circumstances? Thanks in advance.

No. That will never reset new contestability. Only lapsing the policy and reinstating it could do that.

 

[pcbinsurance]

Beneficiary changes don't change a thing about the policy.

 

[Larry Tew]

Beneficiary changes don't change a thing about the policy.

... except who gets the money.

 

[bill3173]

Only lapsing the policy and reinstating it could do that.

That is a sad fact. It should be illegal.

 

[PANate83]

Thank you very much for everyone's insight here.

 

[VolAgent]

That is a sad fact. It should be illegal.

Why would it be illegal? A reinstatement application will ask about health. Those statements are now subject to a new contestability period. If they wanted to avoid the policy becoming contestable again, they should have kept the payments current.

A reinstatement does not restore the right to contest to the original application. It only gives a new period to statements on the reinstatement application. The original application is only subject to the 2 years from the time of application.