What is an insurer required to do when faced with an error made under the Misstatement of Age Provision?

• A. Cancel the policy
• B. Pay age corrected benefits
• C. Increase the policy's face amount
• D. Issue a new policy at standard rates

Answer: (B)

When a misstatement of age occurs, the policy is not canceled; instead the insurer adjusts the benefits to reflect the insured’s true age. The misstatement-of-age provision ensures the death benefit is what the premiums actually paid would have purchased at the correct age. So the insurer pays age-corrected benefits, which could mean a reduced or adjusted death benefit to match the true age. This approach protects both sides by aligning coverage with the accurate cost of insurance, rather than forcing a new policy or altering the face amount upward without basis.