RESCISSION

Question 1

GROUNDS FOR RECISSION

Answer 1

A. Concealment
B. Misrepresentation
C. Breach of material warranty
D. Breach of a condition subsequent

E. ALTERATION OF THE THING INSURED

Question 2

TRUE OR FALSE

THE INSURER CAN EXERCISE THE RIGHT TO RESCIND THE CONTRACT BEFORE OR AFTER THE INSURED HAS FILED AN ACTION TO COLLECT THE AMOUNT OF INSURANCE

Answer 2

FALSE

THE INSURER MUST EXERCISE THE RIGHT TO RESCIND THE CONTRACT BEFORE THE INSURED HAS FILED AN ACTION TO COLLECT THE AMOUNT OF INSURANCE

Question 3

REQUISITES OF INCONTESTABILITY

Answer 3

1. Life insurance policy
2. Payable on the death of the insured
3. It has been in force during the
   lifetime of the insured for a period
   of at least 2 years from the date
   of its issue or of its last
   reinstatement

Question 4

EFFECTS WHEN POLICY BECOMES INCONTESTABLE

THE INSURER MAY NOT USE THE FOLLOWING DEFENSES

Answer 4

1. Policy is void ab
   initio
2. Policy is
   rescindable by
   reason of the
   fraudulent
   concealment or
   misrepresentation of
   the insured or his
   agent

Question 5

DEFENSES NOT BARRED BY INCONTESTABILITY CLAUSE

Answer 5

1. That the person
   taking the insurance
   lacked insurable
   interest as required
   by law;
2. That the cause of
   the death of the
   insured is an
   excepted risk;
3. That the
   premiums have not
   been paid (Secs. 77,
   227[b], 228[b],
   230[b]);
4. That the
   conditions of the
   policy relating to
   military or naval
   service have been
   violated (Secs.
   227[b], 228[b]);
5. That the fraud is
   of a particularly
   vicious type;
6. That the
   beneficiary failed to
   furnish proof of
   deathor to comply
   with any condition
   imposed by the
   policy after the loss
   has happened; or
7. That the action
   was not brought
   within the time
   specified.