A misrepresentation on an application generally allows an insurer to void the policy only when the misstatement was:
Explanation
A misrepresentation must be material, meaning that had the insurer known the truth it would have declined the risk or charged a different premium, before it can serve as grounds to rescind the policy. Whether the statement was verbal or written is not the deciding factor. The beneficiary designation is generally not a material underwriting fact. And a misstatement discovered after the incontestability period usually cannot be used at all, so late discovery works against the insurer rather than for it.
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Related questions on this topic
- The doctrine that both parties to an insurance contract rely on the honesty and full disclosure of the other is known as:
- A statement an applicant makes on an insurance application that is believed true to the best of their knowledge, rather than guaranteed to be literally true, is a:
- The intentional withholding of a known material fact during the application process is called:
- A producer exceeds the powers actually granted by the insurer, but a reasonable applicant believes the producer is acting for the insurer. The producer is exercising:
- The powers a producer is specifically granted in the written agency agreement with the insurer are called:
- Persuading a policyowner to drop an existing policy and replace it by using misleading or incomplete comparisons is the unfair trade practice known as:
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