What the company tends to look at is the recent symptoms that would have suggested to a reasonable person there was a health problem. While it is possible (although rather doubtful) that he will be found to have been a smoker 20 years after the fact based on the investigation, they sure will look at recent records and that may appear in one of the records.
Further the fact that he smoked 20 years ago may not be a MATERIAL MISPREPRESENTATION, but I can't answer that, nor do I know if the company's underwriting rules would have handled a 20 years ago smoker differently than a person who never touched a cigarette. Unless the deciison to issue would have been different, they'd be obligated to pay. That's what the key is. And also, as a practical matter, I'd argue it was reasonable to answer no as based on what I have seen, the negative effects are gone after 20 years. Suppose he had said yes "but not in past 20 years"?
In any event while the policy is clearly "contestible" my sense is that it is a matter that a good lawyer can get paid in part, at least, if the cmpany fears a bad faith claim may lie.
Rather than "wait and see" if they pay I suggest that you consult a lawyer, NOW, who knows insurance and can help advise you on what to say if asked and assist you get the claim paid should there be a reluctance to pay it. It often is easier to get payment authorized BEFORE a final decision is made that the company feels it has to defend, as egos play a role. Lawyers are best in the early stages.