Health · Chapter 18 · Optional Provisions
Misstatement of Age (Health)
Definition
Optional provision: benefits are adjusted to what the premium paid would have purchased at the correct age. Age understated (said younger) → benefits reduced. Age overstated (said older) → benefits increased — unless that would exceed the loss or allowable indemnity, in which case the premium is reduced and the excess refunded. The policy is not canceled.
Example
Jordan (30) lists her age as 25 on a disability income application. Her $100 annual premium bought a $500/month benefit at age 25 — at her true age it buys $400/month, so the benefit is adjusted to $400. Premium stays $100.
Exam tip
Said too YOUNG → benefit goes DOWN. Said too OLD → benefit goes UP. Adjust, never rescind.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms