What is a common consequence of misstatement of age in insurance?

The common consequence of a misstatement of age in insurance is that adjusted benefits will be provided. When an individual applies for life insurance, the premiums and coverage amounts are often based on the applicant’s age. If the age is misstated and later discovered, the insurance company typically calculates the benefits based on the correct age.

If the applicant is older than stated, the insurer may reduce the benefit amount since older individuals generally pose a higher risk. Conversely, if the applicant is younger than stated, they may have been paying lower premiums, which could lead to an increased benefit amount, but also potentially affect their premium structure retroactively. The key point is that the insurer doesn’t deny coverage outright; instead, they adjust the policy benefits to reflect the true age of the insured.

This adjustment ensures that the policy is fair and aligns with the risk associated with the true age of the policyholder, highlighting the importance of accurate information when applying for insurance.