Final answer:
No, the insurer will not pay. Chad intentionally lied about his serious lung problems on the insurance application, which is considered a material misrepresentation. Insurance policies are based on utmost good faith, and intentionally withholding information can void the policy.
Step-by-step explanation:
No, the insurer will not pay. Chad intentionally lied on the insurance application about his lung problems and recent visit to a lung center. This is considered a material misrepresentation, which is grounds for voiding the insurance policy. Insurance policies are based on the principle of utmost good faith, which requires the applicant to disclose all relevant information truthfully and accurately. By intentionally withholding information about his serious lung problems, Chad violated this principle and the insurer has the right to deny the claim.
The relevant provision for denying the claim is typically found in the insurance policy's application or the policy itself. It is common for insurance policies to include a provision stating that the policy is void if the insured knowingly makes false statements or conceals material facts. In this case, Chad's intentional misrepresentation about his serious lung problems would be considered a material fact that would have affected the insurer's decision to issue the policy.
It is important for insurance applicants to disclose all relevant information truthfully and accurately to avoid these situations. Failing to do so may result in the denial of a claim or even legal consequences.