Life & Health Insurance Practice Exam 2025 – Your All-in-One Guide to Exam Success!

An insurance policy could be deemed void due to material misrepresentation, which occurs when an applicant deliberately provides false information or omits relevant facts when applying for coverage. This misrepresentation can significantly impact the insurer's decision-making process regarding risk assessment and the underwriting of the policy. If the insurer would not have issued the policy, or would have done so on different terms, had they known the truth, they may choose to void the policy.

Material misrepresentation is deemed serious because it undermines the principle of insurable interest and good faith in the insurance contract. Insurers rely on accurate and complete information to assess the risk associated with the policyholder. Therefore, if it is discovered that crucial information has been misrepresented, the insurer may have grounds to void the policy from the outset as if it never existed.

The other options, such as a change in ownership, missed premium payment, or change of address, typically do not by themselves lead to the voidance of a policy. A change in ownership may require notification to the insurer but doesn't inherently void coverage. Likewise, failing to pay premiums can result in policy lapses or cancellations but is usually addressed through grace periods or reinstatement options rather than voiding the policy entirely. A change of address is a