Question

When can a policy no longer be canceled for nonfraudulent misstatements after its date of issue?

a) 1 year
b) 2 years
c) 3 years
d) 5 years

Answer 1

A policy can no longer be canceled for nonfraudulent misstatements after 2 years, which marks the end of the incontestability period.

Step-by-step explanation:

In the context of insurance, a policy can no longer be canceled for nonfraudulent misstatements after its date of issue once the contestability period has passed.

This period, known as the incontestability clause, typically lasts for 2 years after the policy is issued. During this time, the insurance company reserves the right to review the policy for inaccuracies or misrepresentations in the application.

After the incontestability period, the insurer cannot cancel the policy for nonfraudulent misstatements, which means the correct answer is (b) 2 years. It is essential to read and understand the specific terms of any insurance policy, as these periods may vary based on the jurisdiction and specific insurance contract.