Washington Life Producer Practice Exam

What triggers the start of a life insurance policy’s contestability period?

1. First premium payment made

2. Issuance of the policy

3. First claim filed

4. Policy renewal date

The correct answer is: Issuance of the policy

The contestability period for a life insurance policy is triggered by the issuance of the policy. This period typically lasts for two years from the date the policy is issued. During this time, the insurance company has the right to review and contest any claims made based on the information provided in the application. If any misrepresentations or omissions are found in the application within this timeframe, the insurer can deny claims or rescind the policy altogether. This concept is essential for both insurers and insured parties; it serves to protect insurance companies from fraudulent applications while also providing assurance to policyholders once the contestability period has passed. After this period, the insurer generally cannot deny a claim based on misstatements made in the application, so understanding the initiation of this period is crucial for anyone engaging with life insurance products.