An applicant for life insurance states on the application that she is 45 years old when she is actually 46. If this statement does not affect the insurer's decision to accept the risk, the statement is best characterized as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A representation on an application is a statement made to induce the insurer to issue the policy. Under California law, a false representation gives the insurer the right to rescind only if it is material, meaning it would have influenced the insurer's decision or rate. A one-year age error that does not change the underwriting decision is non-material, so the policy remains in force. This principle is reinforced by the age-misstatement provisions of life policies, which adjust the death benefit to what the premium would have purchased at the true age rather than voiding the contract.
Why the other options are wrong
- B) Warranties must be strictly true and their material breach allows rescission, but the age on an application is a representation, not a warranty.
- C) Concealment is the failure to disclose a material fact; here the applicant affirmatively stated an inaccurate fact, which raises a misrepresentation issue.
- D) Fraud requires an intent to deceive and a material effect; a one-year age error without underwriting impact is not fraud and does not void the contract.
Memory hook
Representations need to be substantially true and material to count. A harmless slip keeps the coverage alive.