What happens in case of a misstatement of age in an insurance policy?

In the event of a misstatement of age in an insurance policy, benefits will be calculated based on the correct age premiums. This means that if a policyholder incorrectly states their age during the application process, the insurance company will adjust the benefits payable in accordance with the premiums that would have applied had the correct age been disclosed.

The rationale behind this approach is to ensure equity and fairness in the underwriting process. Insurance premiums are often based on age, as it is a significant factor in determining risk. If the insured's actual age is higher than what was stated, the insurer may have charged lower premiums than warranted. Consequently, in such cases, the benefits provided would reflect what the insured's actual contribution would have afforded, ensuring that they do not receive more coverage than what they would be entitled to based on the fair risk assessment.

Conversely, if the stated age had been lower than the actual age, the insurer would typically adjust the benefits downward to align with what the premiums for the correct age would have purchased. This system prevents potential losses and ensures that the insurance policies remain viable and sustainable for the insurance company.