Which of the following is a valid reason for an insurer to rescind a life policy after two years?

Question

Certilyst · Accepted Answer

A Rationale: Material misrepresentation in the application is a valid reason for an insurer to rescind a life policy after two years. This is because if an insurer discovers that an applicant provided false or misleading information that influenced their decision to issue the policy, they are entitled to void the contract.

Clerical error in age does not justify rescission; instead, insurers typically correct such mistakes without voiding the policy.

Late premium payment can lead to policy lapse or cancellation, but it does not provide grounds for rescission after two years, as policies are generally maintained despite minor payment issues.

Change in health status after the policy is issued does not constitute grounds for rescission, as insurers cannot rescind a policy based on information that arises post-issue unless it relates to misrepresentation at the time of application.

California Life Accident and Health Agent Practice Exam

Which of the following is a valid reason for an insurer to rescind a life policy after two years?