If an insured misstates their age on a life insurance application, what might be the consequence?

When an insured misstates their age on a life insurance application, the consequence typically involves an adjustment in the amount of the death benefit. Life insurance premiums are largely based on the age of the insured; therefore, if the insured’s actual age is different from what was stated, the insurance company can adjust the policy accordingly.

For example, if the insured is older than what was declared, the premiums paid may have been lower than what should have been charged based on their actual age, and, in the event of a claim, the insurer may adjust the death benefit to reflect what it would have been had the correct age been provided. This adjustment ensures that the policy remains equitable for both the insurer and the insured according to the risk represented by their true age.

This approach provides a balance between the insurance company needing to ensure they are covering the correct risk level while still allowing the policy to remain in effect instead of lapsing or being rescinded, which would negatively impact the insured's coverage.