_____ states that after a policy has been in force for over two years, the insurance company cannot contest or void the policy except for nonpayment of premium or fraud committed by the insured. If there is a misrepresentation (a lie) or a concealment(withholding of facts) discovered in the first two years, it must be material for the insurance company to deny coverage or to cancel the policy.
**Material means that it is a fact that is important enough that had the insurance company known it, it could have changed either the decision to issue the insurance policy or to issue the policy on substantially different terms. The misstated information is said to be material only if the truth would have resulted in the insurer making a different underwriting decision. (i.e., rate–up, a surcharge, or exclusion rider).
**Lying about smoking, age, or gender is NOT considered material. However, the coverage will be adjusted if one lies about age or gender, and the non-smoking discountwill be removed if one lies about smoking.
**The insurance company must return all of the premiums (no interest) paid if a claim is denied or a policy is canceled during the first 2 years of the contract.