Misrepresentation in the application process.

• A. It has no effect on coverage.
• B. It only affects premium amounts.
• C. It guarantees policy issuance.
• D. It can void or alter coverage.

Answer: (D)

Misrepresentation in the application process means the applicant provided information that isn’t true or complete, and that information is material to the insurer’s decision about accepting the risk and setting the premium. Because underwriting relies on accurate disclosures about health, age, lifestyle, and similar factors, false statements can change how the policy is issued. When a misrepresentation is discovered, the insurer isn’t obligated to keep the policy as issued; it can rescind the contract, or alter the coverage (for example, reduce the death benefit) to reflect the true risk. This is why misrepresentation can void or modify coverage rather than have no effect, only influence premiums, or guarantee issuance.