An insurer discovers a material misstatement in a Massachusetts life insurance application and wants to contest the policy. What must be shown for the misstatement to defeat the policy under the statute governing statements in applications?

Why C is correct

Under M.G.L. c. 175, § 186, a misstatement in an application defeats the policy only on one of two prongs: actual intent to deceive, or a misstatement that increased the risk of loss. The increased-risk prong is broad, so even an error without deceptive intent can void coverage if it materially raised the risk the insurer assumed — but a misstatement that satisfies neither prong cannot.

Why the other options are wrong

• A) The mere existence of a misstatement is not enough under M.G.L. c. 175, § 186; the statute requires intent to deceive or increased risk of loss.
• B) The disciplinary record of the producer who took the application is beside the point; M.G.L. c. 175, § 186 turns on the applicant's intent or the risk effect, not the producer's history.
• D) Refusing follow-up questions is not a statutory prong; the test under M.G.L. c. 175, § 186 is actual intent to deceive or increased risk of loss.

Memory hook

Intent to deceive or added risk — either prong voids; mere error alone does not.