General Insurance PrinciplesQuestion 191 of 716
On her life insurance application Maria states she has never used tobacco. She had quit two years before applying and believed the answer was correct. Three years later she dies and the insurer learns she had smoked socially as a teenager. Maria's statement is BEST classified as a:
a.Concealment of a material fact that voids the policy from inception
b.Warranty of absolute truth whose breach justifies rescission of the policy
c.Representation that, if immaterial, will not defeat the claim
d.Fraud that voids the policy and exposes her estate to criminal penalty
Explanation
A representation is a statement made to the best of one's knowledge. If it is not material to the risk, the insurer may not rescind. Warranties require strict truth, concealment requires intentional withholding, and fraud requires intent to deceive.
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Related questions on this topic
- Because an insurance policy is a contract of adhesion, California courts will interpret any ambiguity in the policy:
- Under California Insurance Code §330, neglect to communicate that which a party knows and ought to communicate is called:
- Under California law, a fact is considered material if:
- The doctrine that requires both the applicant and the insurer to deal honestly and disclose all material facts is known as:
- When must insurable interest exist for a life insurance policy in California?
- Which of the following persons does NOT automatically have an insurable interest in another's life?
Last reviewed: · editorial process
PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)