meaning
Solve the problem of "difficult claims". The lack of "incontestable clause" has led to two adverse consequences: on the one hand, because the insurer relaxed the examination conditions when applying for insurance without any clause, those who wanted to cheat insurance thought they had an opportunity and took out insurance one after another, and the number of policies with hidden dangers of dishonesty naturally increased; On the other hand, life insurance is often long-term. For those insured, insured and beneficiaries who have not been informed because of negligence, they will suddenly find that they have lost their insurance protection after many years. If they apply for insurance with the same conditions again, the premium will surge. Obviously, this is very unfair to the insured.
The phenomenon of "adverse selection" of insurers to stop "evil against evil" refers to: some insurers still charge insurance premiums when they know that the insured has not told them truthfully, and if the insurance accident does not happen, both parties will live in peace; In the event of an insurance accident, the insurer will not compensate the insurance premium or refund the insurance premium on the grounds that the insured has not told the truth. This kind of "hidden rule" of the industry, which is regarded as "controlling evil with evil", has been criticized. For insurance companies, the "incontestable clause" is more than just a "ticket". "From the international experience, after the establishment of the' incontestable clause', the rights and obligations are equal, which makes the international insurance industry achieve rapid and healthy development." Lawyer Li Bin said that the "incontestable clause" came into being on the basis that with the rapid development of insurance industry in developed countries and the emergence of a large number of participants in the insurance market, some dishonest insurance companies abused the right to terminate the contract for their own interests, refused to undertake the contractual obligations stipulated in the insurance contract, maliciously refused to pay compensation, infringed on the legitimate contractual interests of insurance consumers, and led to a great reduction in the trust of the whole society in the insurance industry. The emergence of this situation has greatly hindered and restrained people's demand for insurance, an imperfect commodity, and in fact it has also become a fetter for the development of the insurance industry.
exception
The incontestable clause is generally limited to disputes over the validity of the policy, aiming at prohibiting disputes over the validity of the policy due to fraud, concealment or material misstatement of the applicant. There are exceptions to this rule. In the case of impersonation, loss of insurance interest, intentional homicide by the insured, etc. Even if the dispute period ends, the insurer can raise a defense [5] Generally speaking, the insurer's defense based on the following reasons is not bound by the incontestable clause: (1) If an accident occurs during the incontestable period, the right to terminate the contract will not be extinguished due to the expiration of the incontestable period, and the insurer can still notify that the obligation is defective and terminate the contract. Anglo-American legislation generally stipulates that "this contract is uncontroversial after one year from the date of establishment, provided that the insured is still alive" to prevent the insured or beneficiary from evading it. (2) Failure to pay the insurance premium is not bound by the incontestable clause. (3) The applicant must have insurable interest in the subject matter of insurance and prevent the use of life gambling and moral hazard factors. Therefore, the argument of insurable interest is not within the adjustment scope of this rule. (4) Although this rule is applicable to general fraud, especially serious fraud may still invalidate the contract, such as pretending to be the insured for medical examination [6]. In insurance practice, incontestable clauses mainly exist in long-term life insurance, health insurance and accident insurance contracts.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.