Which of the following is NOT a valid reason for an insurer to contest a life insurance policy during the policy's first two years of existence?

The correct response is that a misstatement of age is not a valid reason for an insurer to contest a life insurance policy during the first two years of its existence. Insurance contracts, including life insurance policies, often contain provisions that specifically address the treatment of age misstatements. If an insured misstates their age, the insurer typically adjusts the policy's benefits or premiums according to the correct age rather than contesting the policy outright during that initial two-year period.

In contrast, fraudulent statements, non-payment of premiums, and material misrepresentation can serve as grounds for contesting a policy within the first two years. Fraudulent statements indicate a clear intention to deceive the insurer. Non-payment of premiums can lead to a lapse in coverage, while material misrepresentation relates to significant inaccuracies that could affect the insurer's decision to underwrite the policy. Thus, these circumstances provide the insurer with valid reasons to contest a policy early in its term, whereas misstatement of age does not result in policy contestation but rather leads to a recalibration of the terms of coverage.