CONTESTABLE PERIOD CLAUSE IN LIFE INSURANCE CONTRACT INDONESIAN

Abstract

Purpose:  Contestable period becomes a common conflict in the insurance industry in Indonesia. That issue brings a negative image to the insurance industry. Both by the insurer and the insured need more profound knowledge on the contestable period from a legal point of view to minimize that kind of conflict. Thus, to get that knowledge this study aims at examining the conception and application of the contestable period clause by judges.

Methodology: This study is   a legal  research method   with several approaches  including conceptual approach, statute approach and case approach. The legal substances for this study derived from primary and secondary sources by analyzing court judgments qualitatively.

Methodology: This study is a legal research that follows the content analysis approach. The procedure of the study includes define the term, specify a unit of analysis, locate relevant data, develop a rationale, develop a sampling plan, formulate coding categories, check data reliability and validity, and analyze data. To choose the sample of the study, the researchers used a purposive sampling technique. The data of the study were taken from court judgments, books, and articles in national and international journals concerning life insurance disputes. To analyze the data the researcher used an interactive model of analysis that consists of three steps, namely data reduction, data display, and conclusion drawing/verification.

Result: This study found that the judges made the conception by viewing the contestable period as both rights and obligations. It means that the insurers cannot only view it as a right to decline the insurance claim from the insurance beneficiaries, but they also should take it as an obligation. The obligation here is doing an investigation toward the insured statements on the contract right away after the contract was signed. In other words, in the application contestable period, the judges assumed that the insurer tends to use the contestable period as a way to avoid the beneficiaries’ claim.]

Application: The result of this study is very helpful for life insurance companies, public society, justice institutions, and the government to revise the law of insurance for the sake of justice for all parties in the life insurance contract.

Novelty/Originality: Judges in Public Court, High Court, and Supreme Court [viewed the essence of the contestable period clause as a right and obligation at the same time. Therefore, they did not take this clause as their legal consideration in making judgments.