If a life insurance policy application contains a misrepresentation about the insured's age, what will typically happen to the death benefit?

When a life insurance policy application includes a misrepresentation regarding the insured's age, the typical outcome is that the death benefit will be adjusted to reflect the correct age. This adjustment is based on the principle of equitable treatment in insurance.

Insurance premiums and benefits are actuarially determined based on the policyholder's age. If an applicant states an incorrect age, the insurer has the right to reassess the policy based on accurate information. For example, if the insured is actually older than reported, the insurer would calculate the death benefit as if it were issued at the correct age, which often leads to a lower benefit amount since older individuals generally face higher mortality risk. Conversely, if the insured were younger than stated, the premiums might have been calculated incorrectly and the insurer may provide a higher benefit accordingly.

This adjustment process fosters fairness, allowing both the insurer and the insured to operate on accurate data, which is vital for the sustainability of the insurance product. Keeping these principles in mind, adjusting the death benefit to reflect the correct age ensures a balanced and just approach to risk and coverage.