Sorry to be blunt: did your father die from a condition that was existing -or ,rather, known to be existing - at the time of taking the policy.
If yes, then all insurance policies would disallow payment.
I've sold thousands of such polciies. can't say i recall the age of a parent being asked (silly question really because many travellers over,say, 40 would have parents over 75).
However, every policy I sold did mention pre-exisitng conditions.
That means if your father had a bad heart and died from a heart attack then you can't claim.
I suspect the loss adjustors are claiming that your not mentioning his age and residence was "a material fact" which ,on any type of policy it is up to the policy holder to declare. Whether or not it really was a material fact I doubt.
The only material fact in my opinion was his state of health at the time .
If he was in reasonable health for his age then I'd fight them. A doctors cert may be required.