A statement that, if discovered, would change the underwriting decision; if misrepresentation is intentional, it is considered fraud.

A statement that, if discovered, would change the underwriting decision; if misrepresentation is intentional, it is considered fraud.

• A. Fraud
• B. Warranties
• C. Death benefit
• D. Material misrepresentation

Answer: (D)

A statement that would change the underwriting decision is a material misrepresentation. The key idea is that the misstatement must be significant enough to affect how the insurer prices or issues the policy. If such a misstatement is intentional, it becomes fraud, but the term that specifically describes the misstatement itself in the underwriting context is material misrepresentation. Warranties refer to strict promises in a contract and aren’t about what affects underwriting, and the death benefit is simply the amount paid out later, not a statement used in underwriting decisions.

A statement that would change the underwriting decision is a material misrepresentation. The key idea is that the misstatement must be significant enough to affect how the insurer prices or issues the policy. If such a misstatement is intentional, it becomes fraud, but the term that specifically describes the misstatement itself in the underwriting context is material misrepresentation. Warranties refer to strict promises in a contract and aren’t about what affects underwriting, and the death benefit is simply the amount paid out later, not a statement used in underwriting decisions.