Term Life - California - 2yr period?

Life insurance question for California.

I think there is a rule that insurance which is in effect for at least 2 years cannot be cancelled due to undetected or undisclosed medical conditions.

What is the legal phrase? Is that still true or has it changed in recent years?

Incontestablilty Clause

This policy shall be incontestable after it has been in force for a period of two years from date of issue...

The reason why this provision is in effect is to prevent life insurance companies from challenging the validity of a claim after the insured dies, two years or longer after the policy was issued.

Typically, the insured dies several years after a life insurance policy is opened. If the insurer contests, claiming that the policy is fraudulent, the beneficiary is at a loss here because he/she is already strapped financially, and therefore doesn't have enough money or energy for a lawyer or to engage in any legal battles.

This clause also gives rise to the prompt payment of the death benefit. This is a great relief to the beneficiary, for whom this provision was written for.

You may be referring to "Incontestable Clause" in a life insurance policy.

The "Incontestable Clause" section in the life insurance policy states that after the policy is in force for two years, the insurance company cannot void it because of misrepresentation or concealment by the insured in obtaining the life insurance policy.

This is a standard clause in almost all life insurance policies.

I hope that helps! Best of luck to you.

Not true.

What I think you're referring to, is that the policy is UNCONTESTABLE after two years. That means, if the insured dies within the first two years, the insurance company can request medical records and "verify" answers on the application, to see if there were any lies or "oops I forgot I'm a smoker" kinda answers. If they find that there's a lie on the application, they don't pay out, they only refund the premium.

Additionally, they don't pay out for a suicide, within the first two years (note, that doesn't mean suicide is covered after two years - there CAN be an absolute suicide exclusion on the policy).