When may an insurer deny an application for life insurance?

The correct reasoning behind the answer is grounded in the risk assessment process that insurers undertake during the underwriting of life insurance applications. Insurers carefully evaluate the information provided by applicants to determine their insurability and the premium rates to set. If an applicant poses significant risk factors—such as a history of serious medical conditions, risky lifestyle choices (like smoking or dangerous hobbies), or a high-risk occupation—the insurer has the right to deny the application. This approach is crucial for protecting the insurance pool's integrity and ensuring that premiums accurately correspond to the level of risk the applicant represents.

In the context of the other options, the payment of the first premium does not relate directly to the decision to deny coverage, as this typically occurs after underwriting and acceptance of the application. Disclosures regarding medical conditions must be factored into the decision-making process, but simply having disclosed conditions does not automatically lead to denial unless they fall into a significant risk category. Lastly, while suspicion of false information can indeed lead to denial, it hinges on the inherent risk assessment of the applicant's profile rather than the mere act of submission. Hence, the risk factors that an applicant presents remain the primary reason for potential denial.