What happens to benefits if there is a misstatement of age?

When there is a misstatement of age, the benefits are adjusted to reflect the premium for the correct age. This is an important aspect of life insurance policies because the premium and the coverage amount are often calculated based on the insured's age. If the age is misstated, either due to an error or misunderstanding, the insurer will recalibrate the policy to reflect the correct age rather than maintaining the original terms.

For instance, if an individual understated their age, resulting in a lower premium, the insurer would adjust the benefits downward to correspond with what the true premium would have been for the correct age. Conversely, if an insured overstated their age, they might pay a higher premium, and the benefits could potentially be increased to align with what would have been provided for the accurate age.

This provision is enacted to ensure that the insurance coverage remains fair and equitable based on the actual risk presented by the policyholder’s true age, which ultimately affects mortality risk. By recalculating the benefits according to the correct age, both the insurer and insured are maintaining the integrity of the policy.