Exam 16: Insurance and Guarantee

Which of the following is NOT a defence available to a guarantor when an action is brought by the creditor to have the guarantor held liable for the debt of the principal debtor?

When Dennis applied for a policy of life insurance,one of the questions on the medical questionnaire asked: "Have you ever been hospitalized?" Dennis answered truthfully that he had been hospitalized in 1993 to have his tonsils out and in 1996 to have his appendix out.The life insurance policy was issued.Sixteen months later Dennis died of a heart attack and the insurance company discovered that he had been hospitalized in 1985 due to a mild heart attack.The beneficiary of the life insurance policy applied for the death benefit,claiming quite correctly that Dennis had been truthful in the application,but the insurance company refused to pay the death benefit.What legal basis does the insurance company have for refusing to pay?