If the insured's age was misstated at issue and death occurs, which statement best describes the insurer's liability?

• A. The full face amount
• B. The prorated amount based on the incorrect age
• C. The policy is void
• D. A prorated death benefit based on the correct age

Answer: (D)

When the insured’s age is misstated at issue, the contract is not voided. Life insurance policies include a misstatement of age provision, so if death occurs, the insurer pays an amount that the policy would have provided if the correct age had been known. This means the death benefit is adjusted to reflect the correct age, effectively prorating the benefit based on what the premiums paid would have bought at that age. In short, the payout is determined using the correct age, not the misstated one, so the death benefit is prorated accordingly.