What Is the Effect of an Incontestability Clause

question 50

Multiple Choice

What is the effect of an incontestability clause?

• A) The insured cannot file a claim more than a specified time following the insured event.
• B) The insurer cannot challenge the information in the application after a specified time.
• C) The insured is required to not challenge the statements made by its own insured.
• D) The state is prevented from challenging any claim payment decisions of the insurer.
• E) The insurer is prevented from canceling an insurance policy due to nonpayment.

---

Definitions:

Differentiate

To identify or establish the differences between two or more things, or to create unique offerings in a market.

Monopolistically Competitive

A market structure in which many companies sell products that are similar but not identical, allowing for competition based on quality, price, and brand.

Differentiated Product

A product that is distinct from other similar products based on qualities like design, quality, or features, often achieved through branding and marketing.

Barriers

In economic terms, barriers typically refer to obstacles that impede the flow of goods, services, capital, or labor across borders, such as tariffs, quotas, or regulations.