What happens in the case of misstatement of age in life insurance?

In the case of a misstatement of age in life insurance, the policy typically allows for an adjustment of the insurance amount based on the premiums that would have been charged according to the correct age. This practice ensures that the insurance company can maintain fairness in underwriting and premium calculations.

When a policyholder misstates their age, this can significantly affect the risk assessment from the insurer's perspective. If the correct age is higher than reported, the premium for the policy is usually lower than it should have been, which means that in the event of a claim, the benefit payable is adjusted to reflect what the premiums would have ensured if the correct age had been stated.

For example, if a younger individual pays premiums that are calculated based on their age but are older, when that individual passes away, the insurer will pay out a benefit that correlates with the age at which the premiums should have been calculated. This adjustment acknowledges the importance of accurate age disclosure while ensuring that the costs and benefits of the insurance remain balanced according to the underwriting guidelines. Therefore, the policy adjusts accordingly, reflecting the appropriate level of coverage based on the true age of the insured.