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When shopping for insurance it is important to understand the definitions and terminology associated with the industry. Click Here to learn more.
Contestability, Contestable Clause
In an insurance there is a clause which explains the conditions under
which the insurer may contest or void the life insurance policy. This contestability
is for a limited period of time which in most states is two years. After that
period of time the insurance company can not contest the policy. Binder
In lines other than life and health, a binder is an acknowledgement (usually from the agent) that insurance applied for is in force whether or not premium settlement has yet been made or the policy issued. In life and health insurance, binders are not issued, but if premium settlement is made with the application, what is often erroneously referred to as a 'binder' is issued. Actually this is a conditional binding receipt.
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