DISABILITY INSURANCE POLICIES
41-2106. Time limit on certain defenses. (1) There shall be a provision as follows:
"Time Limit on Certain Defenses:
(a) After two (2) years from the date of issue of this policy, no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or disability, as defined in the policy, commencing after the expiration of such two (2) year period.
(b) No claim for loss incurred or disability, as defined in the policy, commencing after two (2) years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy."
(2) The policy provision of (1)(a) above shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during such initial two (2) year period, nor to limit the application of sections 41-2118 through 41-2122, Idaho Code, in the event of misstatement with respect to age or occupation or other insurance.
(3) Notwithstanding the provisions of section 41-2106(2), Idaho Code, if an insurer elects to use a simplified application form, with or without a question as to the applicant’s health at the time of application, but without any questions concerning the insured’s health history or medical treatment history, the policy must cover any loss occurring after twelve (12) months from any preexisting condition not specifically excluded from coverage by terms of the policy, and, except as so provided, the policy or contract shall not include wording that would permit a defense based upon preexisting conditions.
(4) A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium (a) until at least age fifty (50) or, (b) in the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue, may contain in lieu of the foregoing, the following provision, from which the clause in parentheses may be omitted at the insurer’s option, under the caption, "Incontestable":
"After this policy has been in force for a period of two (2) years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to any statements, other than fraudulent statements, contained in the application."
[41-2106, added 1961, ch. 330, sec. 495, p. 645; am. 1976, ch. 135, sec. 1, p. 507.]