State RegulationsNY specificDifficulty 3/5
Which statement about the incontestability clause required in New York life policies is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §3203(a)(3), the policy becomes incontestable after it has been in force during the insured's lifetime for 2 years from issue - the contestable period counts only time in which the insured is alive. If the insured dies before that span has fully run, the insurer may still contest the policy. The clause also expressly preserves the nonpayment exception, so it never bars premium-related defenses.
Why the other options are wrong
- A) Incontestability attaches after 2 years in force during the insured's lifetime under §3203(a)(3); the insured's death does not start the period.
- C) Reinstatement under §3203(a)(10) restores the same policy; the 2-year clock in §3203(a)(3) runs from the original date of issue.
- D) Nonpayment of premiums is an express exception to the incontestability clause under §3203(a)(3), so the insurer may always raise it.
Memory hook
The contestable clock ticks only while the insured is living.