Joanne Pistas v. New England Mutual Life Insurance Company, Cross-Appellant v. Yale H. Lauter, Third-Party

EASTERBROOK, Circuit Judge.

An insurance adjuster and onetime agent, three weeks after the removal of 90% of his stomach at the Mayo Clinic on account of cancer, applies for $200,000 of term life insurance. He signs an application denying that he has cancer. A physician signs a statement that he has examined the applicant and sees no signs of illness — despite the prominent unhealed incision from the operation. The insurance company issues the policy, believing the applicant to be in perfect health. But he is undergoing an experimental radiation-chemotherapy regimen, and within nine months is…