If age misstated on the application, which statement is correct regarding the death benefit?

• A. The death benefit paid will be the amount stated in the policy
• B. The death benefit paid will be what the premium would have purchased at the correct age
• C. The death benefit will be reduced proportionally to misstatement
• D. The policy becomes void

Answer: (B)

When age is misstated on a life insurance application, the contract uses the insured’s true age to determine how much coverage the premiums paid would have bought. The death benefit is then paid as that amount, not necessarily the policy’s face value. This adjustment keeps the payout aligned with the true risk and the actual premium dollars that were paid.

For example, if the premiums paid over time would have funded a $150,000 policy at the correct age, the death benefit paid will be $150,000. The policy isn’t automatically voided unless fraud is involved, and it isn’t simply reduced by a proportional factor.