What is an insurer required to do when an error is made under the Misstatement of Age provision?

Under the Misstatement of Age provision, when an error is identified relating to an insured's age, the insurer is required to pay age-corrected benefits. This provision is designed to ensure that benefits reflect the true age of the insured, as age is a critical factor in underwriting and determining the risk associated with the policy.

When a misstatement occurs, the insurer recalculates the benefits based on the correct age of the insured at the time of the policy issuance. This means that if the insured was younger than initially stated, the benefit payout may increase, whereas if the insured was older, the benefit may decrease. This adjustment ensures that the premiums and benefits are equitable based on the insured's actual age.

This approach allows the policy to remain valid and does not necessitate drastic measures such as cancellation of the policy, although correcting premiums or issuing refunds is not aligned with the primary intent of the Misstatement of Age provision; the focus remains on providing accurate age-adjusted benefits. By resolving the matter in this way, both the insurer and the insured are treated fairly according to the proper terms of the insurance contract.