Four years ago, Dieter applied for a life insurance policy. The policy was issued at standard rates. Dieter, now 30 years of age, recently received a letter from the insurance company telling him that his coverage was cancelled. Dieter didn't understand why the insurance company could do this. Possible explanations for the insurance company's decision include:

1. Dieter forgot to pay the current year's premium and the grace period has expired.

2. When Dieter applied for the policy, he forgot to tell the insurance company that he broke his collar-bone playing soccer when he was 16.

1 Only

2 Only

Both 1 and 1

Neither 1nor 2