Final answer:
If an individual fails to disclose a previous medical visit when applying for health insurance, the insurance company must contest the policy within a two-year contestability period. The misstatement must be material to the coverage for the insurer to have the right to contest. Policyholders generally know more about their health history than what an insurer can verify without significant investigation.
Step-by-step explanation:
When an individual, let's call them 'L', applies for a health insurance policy, complete and honest disclosure of their medical history is required. Here, L inadvertently failed to disclose a visit to a cardiologist. According to the principles of insurance contracts, an insurer has a limited time period during which they can contest a policy after issuing it. This period is often referred to as the 'contestability period', which typically lasts for two years. However, if the omission is unintentional, and depending on the jurisdiction and terms of the insurance contract, the insurance company might be required to honor the policy pending they do not uncover the misstatement during this period.
It's important to note that the misstatement must be material to the risk being insured for the policy to be voided. If the insurance company discovers the misstatement within the two-year period and it significantly affects the coverage, they may have the right to contest the policy. Policyholders, like L, possess more knowledge about their health history, which is difficult for insurers to verify without incurring high investigative costs.
Overall, if a misstatement is discovered, an insurance company would typically need to act within the contestability period if they wish to challenge the policy.