When you buy life insurance, the initial three years of the contract is very important. This is because of the contestability clause, which allows insurers to reject the death benefit claim if they find some intentional misrepresentations in the policyholder’s application.
Normally, a life insurance policy is purchased to provide financial security to the policyholder’s family members in case of any unfortunate circumstances like death or disability of the policyholder. But, if the death happens shortly after taking a policy, that is, within three years from the purchase of the policy, the contestability clause applies.
