Which statement about the incontestability clause in a life insurance policy is TRUE?

The statement that the incontestability clause prevents the insurer from denying a claim due to misstatements after a specific period is true. This clause is a standard provision found in life insurance policies, which typically stipulates a time frame during which the insurer can contest the validity of the policy based on misrepresentations or omissions made by the insured.

Once this specified period has elapsed, usually two years, the insurer is generally barred from denying a claim for misstatements in the application, except in cases of outright fraud. This provides a measure of security for the policyholder, ensuring that as long as they have been honest and any claims are made after this period, they cannot be denied coverage simply based on previously disclosed misstatements.

The other options do not accurately describe the function of the incontestability clause. The clause does not allow for contesting the policy indefinitely or restrict itself only to accidental death claims, nor does it grant the insured the right to cancel the policy without penalty. Instead, it is focused on the assurance that after the specified contestability period, the insurer must honor the claim as long as no fraud is involved.