What amount will be paid under a policy if the insured misstated his/her age?

• A. The death benefit stated on the policy
• B. The amount the premiums paid would have purchased
• C. An amount the premium would have purchased at the correct age
• D. The claim is denied

Answer: (C)

When age is misstated on a life insurance policy, the contract includes a misstatement of age provision. This clause ensures the benefit reflected at the time of a claim aligns with the true age of the insured. The insurer will adjust the death benefit to equal the amount the premiums actually paid would have purchased at the insured’s correct age. This prevents gaining more coverage than the premium worth at the true age and keeps the policy fair.

So the payout isn’t necessarily the original face amount, and it isn’t simply the premiums paid or a denial of the claim. It’s the amount the premiums paid would have bought if the age had been stated correctly.