Which term refers to a fixed obligation according to the insured person's age?

The term that refers to a fixed obligation according to the insured person's age is the concept of a misstatement of age. In life insurance, this situation arises when an insured individual provides incorrect information about their age at the time of applying for the policy. Because premiums, coverage amounts, and policy benefits can heavily depend on age, any discrepancies can lead to adjustments in those factors.

For example, if the insurance company discovers that the insured individual is older than originally stated, they might adjust the death benefit or premiums based on the correct age, reflecting the greater risk that comes with age. The policy usually includes a provision that addresses how the insurer will handle such situations, often indicating they will either refund any overpaid premiums or adjust the policy benefits accordingly.

In this context, a misstatement of age directly links the obligations and conditions of the policy to the age of the insured, making it a crucial concept in life insurance practices. Understanding this term helps ensure that policyholders are aware of the importance of providing accurate age information, as it directly impacts the insurance contract.