Question

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?
a) Adjust the claim benefit to reflect the insured's true age
b) Deny any claims and cancel the policy
c) Deny paying a claim based on misrepresentation
d) Pay the full amount of a claim because the contestable period has ended

Answer 1

Answer: a) Adjust the claim benefit to reflect the insured's true age.

Explanation:

In the case of misstatement of the age of insurance provision, a provision is that a life insurance policy will adjust the amount of insurance when the age of insured age is wrongly written on the insurance application to the amount that the premium will cost at the correct age based on the rate of insurer and the date of issuance of the policy.

In the given situation, the insurance company must provide benefits according to the age this will help in determining the true age of the insurance seeker as seeker will try to obtain the benefit and will provide the correct age.