Non-contestability period 'favours liars'

The Law Commission's suggestions would mean insurers could only turn down a claim on the grounds of non-fraudulent non-disclosure if they prove the non-disclosure within three years of the policy being taken out. Although this could lead to fewer declined claims and increased consumer confidence, Briggs warns it is likely to lead to a cross subsidy in favour of liars. He states: “With a non-contestability period of only two years, the experience in the USA is that people are tempted to select against the life company by taking a risk that they will not be ‘found out’. To put it bluntl...