Cheryl buys a life insurance policy with a two-year incontestable clause, and dies three years later. When she dies, her insurer discovers that she lied on application for coverage about her diabetes. What will happen?
A) The insurer will pay the claim.
B) The insurer will void the policy and not pay the claim because Cheryl made a material misrepresentation on her application.
C) The insurer will void the policy and not pay the claim based on the principle of indemnity.
D) Both B and C above
A
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On January 1, 2017, Killion Sales issued $22,000 in bonds for $17,700
These are six-year bonds with a stated interest rate of 11% that pay semiannual interest. Killion Sales uses the straight-line method to amortize the Bond Discount. Immediately after the issue of the bonds, the ledger balances appeared as follows: Bonds Payable 22,000 Discount on Bonds Payable 4,300 After the first interest payment on June 30, 2017, what is the balance of Discount on Bonds Payable? A) debit of $3,942 B) debit of $4,300 C) debit of $4,658 D) credit of $358
Annuities are popular retirement savings products because investment returns on contributions are tax-deferred.
a. true b. false