When Ben Applied for Life Insurance, He Was Asked on the Application

question 44

Multiple Choice

When Ben applied for life insurance, he was asked on the application if he smoked or used tobacco products. Ben answered "No." In reality, Ben smokes two packs of cigarettes a day. The policy was issued at the "preferred, nonsmoker rate." If Ben dies 6 months after the policy is issued, upon what grounds will the insurer be able to legally deny the claim?

• A) warranty
• B) misrepresentation
• C) waiver
• D) concealment

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Definitions:

Arousal Theory

A theory suggesting that people are motivated to maintain an optimal level of arousal, which varies by individual.

Homeostasis

The process by which a living organism maintains stable internal conditions despite changes in its external environment.

Boredom

A state of feeling disinterested and restless due to a lack of stimulation or engagement.

Yerkes-Dodson Law

A psychological principle stating that performance increases with arousal up to an optimal point, after which it decreases.