Fima

The Paul Revere Life Insurance Company (“Revere”) appeals from a declaratory judgment entered in favor of Raoul G. Fima (“Fima”). After a bench trial, the district court held that a 1988 disability insurance policy issued by Revere to Fima was not void ab initio for lack of an insurable interest. In a diversity action, Revere sought to invalidate the policy which contained an incontestability clause on the ground that Fima did not have an insurable interest. The district court had jurisdiction pursuant to 28 U.S.C § 1332(a)(1). We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291 and affirm.

I.

The disability insurance policy at issue was issued by Revere to Fima on January 8, 1988. 1 The policy contained an incontestability clause which stated:

The incontestability clause was in effect at the time Revere brought this action.

In the application for disability insurance, Fima stated that his income for 1986 was *492 $105,000, for 1987 was $85,000, and projected an income of $80,000 for 1988. At trial, the jury found that Fima's actual income for 1986 was $21,603, and that his actual income for 1987 was $6,320. On May 13, 1990, Fima submitted a…