LLQP Practice Exam 2026 – Complete Study Resource

An insurance policy may be considered void if there is deceit or misrepresentation on the application. This principle is fundamental to the insurance contract, as it is based on the concept of utmost good faith (uberrima fides). Insurers rely on accurate and honest information provided by applicants to assess risk and determine policy terms.

If an applicant knowingly provides false information or omits important facts, it can significantly affect the insurer's decision to issue the policy and under what terms. For instance, if an applicant misrepresents their health status, the insurer may be misled in evaluating the risk associated with covering that individual. Consequently, when misrepresentation is discovered, the insurer has the right to void the policy, as the foundational premise of trust in the information provided has been breached.

In contrast, other factors such as insufficient premiums paid, failure to name a beneficiary, or inability to provide cash value do not typically lead to a policy being voided in the same way. These issues may affect the policy's status or benefits but do not fundamentally undermine the honesty and trustworthiness required in the application process. Thus, deceit or misrepresentation stands out as a crucial reason for an insurance policy's voidance.