Health Insurance Mastery Practice Exam

A misrepresentation or false warranty by an insured will NOT void the policy unless:

1. It affects the premium amount

2. There was an intent to deceive or if it materially affects acceptance of the risk

3. It occurs during the underwriting process

4. The insured is aware of the misrepresentation

The correct answer is: There was an intent to deceive or if it materially affects acceptance of the risk

A misrepresentation or false warranty by an insured will not void the policy unless there is an intention to deceive or if it materially affects the acceptance of the risk. This aligns with the principle of utmost good faith, which underscores the obligation of both parties in an insurance contract to act honestly and disclose relevant information. If a misrepresentation is made without intent to deceive, or if it does not materially impact the insurer's decision to accept the risk, the policy generally remains valid. The intent to deceive indicates that the insured was aware that the information provided was false and deliberately sought to mislead the insurer. Furthermore, a materially false statement is one that would have influenced the insurer's decision-making process regarding underwriting and policy issuance. Hence, both factors—intent to deceive and material impact—are crucial in determining whether the policy can be voided due to the misrepresentation. Other options may touch on relevant aspects of insurance but do not capture the necessary conditions under which misrepresentation affects policy validity, making option B the most accurate and comprehensive answer.