State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An applicant for life insurance fails to mention a minor childhood condition that the insurer confirms would NOT have affected its decision to issue the policy. The insurer later discovers the omission and seeks to rescind. Under California law, the result is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Concealment allows the insurer to rescind only when the withheld fact is material. Section 334 defines materiality by the probable and reasonable influence of the fact on the insurer's decision — here, the insurer confirms the condition would not have changed its decision, so the omission is immaterial and no rescission is available. The policy continues in force with full coverage.
Why the other options are wrong
- B) Immaterial omissions do not void the contract; voiding requires a material misrepresentation or concealment.
- C) Rescission always requires materiality, whether the concealment was intentional or unintentional.
- D) Denying coverage while retaining premiums has no legal basis; without rescission the insurer must honor the policy.
Memory hook
No impact, no rescission. Materiality is the switch that lets the insurer out — immaterial facts leave it on.