Alberta General Insurance Level 1 Practice Exam

An applicant may face having their coverage voided from inception if they fail to disclose material facts. This refers to important information that an insurance company would need to know in order to properly assess the risk of insuring the individual. By not disclosing this information, the individual may receive coverage initially but could potentially have their policy cancelled later on if the undisclosed information is discovered. This is why it is important for applicants to be honest and upfront about their situation to avoid any issues with coverage in the future. The other options, such as higher premiums or receiving a bonus, do not accurately represent the potential risk an applicant may face for non-disclosure of material facts.