State RegulationsAZ specificDifficulty 2/5
An insured in Mesa dies more than two years after his life policy was issued. The insurer then discovers a material misstatement in the application and wants to contest the claim. Under A.R.S. 20-1204, what may the insurer do?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
A.R.S. 20-1204 runs the contestable period from the date of issue, not from discovery or death. Once the policy has been in force during the insured's lifetime for two years, the insurer may contest only for nonpayment of premiums, so the Mesa insurer must pay the claim despite the misstatement.
Why the other options are wrong
- A) The clock runs from issue, not from discovery or the date of death, so late discovery does not reopen the window.
- C) The statute creates no discovery-based 30-day extension for contesting after the two-year period.
- D) The beneficiary's knowledge is irrelevant; the contest window under A.R.S. 20-1204 is measured by time in force.
Memory hook
Contestability looks at the issue date, never the discovery date.