Pamela Applies for a Life Insurance Policy with Forever Young

Pamela applies for a life insurance policy with Forever Young Insurance Company.When completing the application form about past surgeries,Pamela forgot about a past outpatient surgery when she had an infected hang-nail removed and her toe treated.One year after issuing the policy,Pamela died suddenly from a brain aneurysm.Forever Young denies payment under the policy based on misrepresentation.If Pamela's sister,Paula,sues Forever Young,she will:

A) win, because once an application has been accepted, an insurer may not use a misrepresentation on the application to avoid liability.
B) win, because Pamela's misrepresentation was not a material fact and did not increase Forever Young's risk in insuring Pamela's life.
C) lose, because Pamela's application contained a misrepresentation of material fact.
D) lose, because an insurer can always use any misrepresentation on an application to avoid paying.