During the first two years, which reason cannot be used by the insurer to contest a life insurance policy?

In Pennsylvania, during the first two years of a life insurance policy, insurers have limited grounds for contesting the policy. One of these limited grounds is the misstatement of age in the application.

If the age of the insured is misstated, insurers often have a provision within the policy that allows them to adjust the benefits according to the correct age rather than voiding the policy altogether. This means that an insurer cannot contest the policy based solely on an age misstatement within the first two years; they can simply modify the benefits if necessary.

In contrast, other reasons such as material misrepresentation, fraudulent activity, and substantial changes in health can be used by insurers to contest the policy during this period. Material misrepresentation involves providing false information that could influence the insurer's decision to underwrite the policy, while fraudulent activity implies intentional deception that the insurer can act upon. Additionally, a substantial change in health can indicate a heightened risk which the insurer can use as a basis for contesting the policy.

The distinction highlights the consumer protection aspect in the initial years of the policy, giving policyholders some assurance that minor errors regarding age will not jeopardize their coverage during that time frame.