What happens if the insured's age was accidentally misstated on an application for an individual life insurance policy?

• A. The policy is void
• B. The premiums are refunded
• C. Benefits will be calculated according to the correct age and the premium paid
• D. The insurer can increase the premium for the misstatement

Answer: (C)

When age is misstated on a life insurance application, the policy isn’t voided. Instead, the contract is adjusted to reflect the insured’s true age. The death benefit is determined as if the policy had been issued at the correct age, and the premiums are adjusted to the correct premium for that age (you may owe more or receive a refund depending on the difference). This is why the best answer states that benefits are calculated according to the correct age and the premium is adjusted accordingly. The other options imply the policy would be canceled, refunds of all premiums, or only an increased premium without adjusting the benefit, which isn’t how misstatement of age is handled.