Which type of insurance policy is exempt from having a contestability period in North Carolina?

A guaranteed issue policy is designed to provide coverage regardless of the applicant's health status or medical history, making it a unique type of insurance. Because these policies are issued without any medical underwriting, they typically do not include a contestability period. In general, contestability periods allow insurers to investigate claims during a set time frame after issuing a policy, usually to prevent fraud. However, since guaranteed issue policies are issued without regard for health, there is no need for a contestability period, as they are meant to provide immediate coverage.

On the other hand, term life policies, universal life policies, and whole life policies usually include a contestability period of two years. This period allows insurers to contest or deny claims based on misrepresentations made by the insured during the application process, which is not applicable for guaranteed issue policies.