What is an Incontestability clause?
In life insurance, an incontestability clause is a standard provision that limits the amount of time an insurer has to contest the validity of a policy after it is issued.
Typically, this period lasts for two years. During that time, the insurer can cancel or deny the policy if it discovers material misrepresentations made in the application. However, once the period ends, the policy becomes “incontestable,” meaning the insurer can no longer challenge it—except in limited circumstances, such as nonpayment of premiums or specific policy exclusions.
This clause provides legal certainty to both the policyholder and their beneficiaries, written directly into life policies.
Oregon’s Incontestability Rule: ORS 743.168
ORS 743.168 is a critical part of Oregon’s life insurance regulations. This statute formalizes the incontestability clause under state law and outlines the specific requirements for life insurance policies issued in Oregon.
For Oregon residents purchasing term or permanent life insurance, understanding this law offers both peace of mind and legal clarity.
Full Text of ORS 743.168
(1) A life insurance policy shall contain a provision that the policy shall be incontestable after it has been in force for two years from its date of issue during the lifetime of the insured, except for nonpayment of premiums. At the option of the insurer the two-year limit within which the policy may be contested shall not apply to the provisions for benefits in the event of total and permanent disability and provisions which grant additional insurance specifically against death by accident.
(2) A provision in a life insurance policy providing that such policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy, and shall not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not such restrictions or exclusions are excepted in such provision.
[1967 c.359 §378]
Read the entire ordinance here. What we can gather is that this is an expected and legally enforceable feature of life insurance policies in the state of Oregon. You can see I bolded the phrase “shall contain” to clear up any ambiguity around wording. But, with all that said, let’s jump into what this all actually means in plain English.
What ORS 743.168 Says In Plain English
- Two-Year Limit on Contesting a Policy
Life insurance policies issued in Oregon must include a clause stating that after being in force for two years during the insured’s lifetime, the policy becomes incontestable—meaning it cannot be voided due to misstatements or errors in the application, as long as premiums are paid. - Exceptions for Disability and Accidental Death Benefits
Insurers have the option to exclude specific provisions from the two-year incontestability protection. These include benefits related to total and permanent disability and additional insurance specifically covering accidental death.
- Policy Exclusions Remain Enforceable
- Even after the two-year incontestability period ends, insurers may still assert defenses based on exclusions or restrictions written into the policy, such as suicide clauses, hazardous activity exclusions, or limitations based on occupation or travel.
Together, these elements mean that the incontestability clause does not offer blanket immunity from claim denials. Rather, it protects against challenges to the validity of the policy itself, not against clearly outlined policy terms.
For example, after two years, an insurer cannot cancel a policy due to a misstatement on the application, but it can still deny a claim if the cause of death falls within an exclusion explicitly stated in the contract. This balance protects both the policyholder’s interests and the insurer’s right to enforce agreed-upon limitations.
What Incontestability Clauses Mean for Policyholders
- Peace of Mind After Two Years
Once your policy has been in force for two years and premiums are up to date, your insurer generally cannot challenge your application details or void the policy based on misrepresentations. - Clearer Claim Expectations
Understanding this clause allows beneficiaries to anticipate the likelihood of a claim being honored, especially in long-standing policies. - Legal Protection Under Oregon Law
ORS 743.168 creates a strong consumer protection framework that gives you confidence in the longevity and enforceability of your life insurance policy.
For Oregon residents, this clause assures that once the contestability period passes, the focus shifts from application details to the actual terms of the coverage, as written and agreed upon.
Tips For Your Insurance Application
Understanding the incontestability clause begins with how you approach the life insurance application itself. Since most challenges from insurers happen within the first two years of coverage, what you disclose during the application process matters greatly.
- Accuracy Is Critical
Oregon insurers can rescind a policy if they discover material misrepresentations within the two-year contestability period. This includes false information about medical history, smoking, alcohol use, or even occupation. Being truthful ensures that your policy won’t be challenged later. - Disclose Everything Asked
Omissions can be just as damaging as misstatements. If an application asks about a medical diagnosis or treatment, failing to answer or selectively disclosing details could result in claim denial—even if the omission was unintentional. - Understand What You’re Signing
Many applications contain language stating that the policy will be issued based on the information provided. Read this language carefully and ask your agent to clarify anything you don’t understand. - Get a Copy of Your Application
Ask for a copy of your submitted application and keep it with your records. This will help in case of a dispute or claim investigation later.
The incontestability clause only protects you after two years and only if the policy is based on accurate and complete information. Treat the application process with the same seriousness as any legal document—it lays the groundwork for long-term security for your loved ones
What This Means for Life Insurance Providers
- Compliance with ORS Requirements
Insurers must include an incontestability clause in all issued life insurance contracts that aligns with the two-year protection standard. - Clarity in Policy Language
Any exclusions from the incontestability rule—such as for disability or accidental death benefits—must be explicitly stated and justifiable under the statute. - Limitation on Post-Claim Underwriting
After two years, insurers generally cannot retroactively investigate and void a policy based on initial application information unless nonpayment is involved.
This legal structure ensures that Oregon life insurance carriers operate transparently, limit litigation risk, and respect both consumer rights and contractual obligations.
The Bottom Line:
The incontestability clause, as defined in ORS 743.168, plays a foundational role in building trust between life insurance policyholders and insurers in Oregon. It provides a clear timeline: after two years, your insurer can no longer challenge the validity of your policy based on information disclosed in the application, so long as premiums are current and the policy is still in force.
This legal protection is especially important for families who rely on life insurance for financial security. But it also emphasizes the need for complete honesty during the application process and careful attention to policy exclusions. While the law shields you from retroactive scrutiny after two years, it does not override the specific terms of your contract.
By understanding how this statute works and how to apply it to your policy decisions, you can protect your loved ones with confidence, knowing that your life insurance will perform as expected when it matters most.
