An error was made on Mary's life insurance application. Errors commonly occur on applications in which area and for which the incontestable clause does NOT apply?

• A. Medical history
• B. Occupation
• C. Financial status
• D. Age

Answer: (D)

The concept being tested is how misstatements on an application are treated when it comes to the incontestable clause. Age is a fact that is easy to get wrong on an application, and it directly affects premiums and the death benefit. The incontestable clause generally protects the insurer after the policy has been in force for a set period (usually two years), preventing the insurer from contesting most statements in the application. However, misstatements of age are a specific exception to that rule. When age is misstated, the contract can be adjusted to reflect the true age, and the incontestable clause does not bar this correction. So, age is the area where errors are common and where the misstatement of age is not covered by the incontestable protection, which is why this option is the best choice.