State RegulationsNY specificDifficulty 3/5
How does New York law treat a misstatement of AGE differently from a material misstatement of HEALTH in a life insurance application?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §3203(a)(5), a misstated age does not void the policy - the insurer pays the benefit the premium would have purchased at the correct age. A material health misstatement, by contrast, may be used to contest the policy, but only within the contestable period of 2 years from issue during the insured's lifetime under §3203(a)(3), since statements are representations under §3204. One rule adjusts the benefit; the other creates a time-limited defense.
Why the other options are wrong
- A) Neither error automatically voids the policy; statements are representations under §3204, absent fraud.
- B) Both have legal effects: age adjusts the benefit under §3203(a)(5), and health misstatements create a contestable defense under §3203(a)(3).
- D) This reverses the rules - it is the age misstatement that adjusts the benefit and the health misstatement that can be contested.
Memory hook
Age adjusts the benefit; health contests expire after two years.