California Life-Only & Accident and Health AgentAccident and Health InsuranceMedium
A health insurance policy includes a provision that states if the insured misstates their age on the application, the benefits payable will be adjusted to what the premium paid would have purchased at the correct age. Which standard policy provision is this?
- AMisstatement of Sex
- BChange of Occupation
- CLegal Actions
- DMisstatement of Age
Show answer & explanationAnswer & explanation
Correct answer: D. Misstatement of Age
The Misstatement of Age provision allows the insurer to adjust the benefits to reflect what the premium paid would have purchased at the insured's correct age, rather than denying the claim or voiding the policy entirely. This is a common practice to ensure fairness.
Why the other options are wrong
- A. Misstatement of Sex is a similar provision but specifically for misstating gender, not age.
- B. Change of Occupation provision addresses how benefits are adjusted if the insured changes to a more or less hazardous occupation.
- C. Legal Actions specifies the timeframe for legal disputes against the insurer, unrelated to age misstatements.
Misstatement of Age Provision
A standard health insurance policy provision that allows the insurer to adjust the benefits payable to the amount that the premium paid would have purchased at the insured's correct age, if the age was misstated on the application.
- Adjusts benefits, does not void policy.
- Based on what premium would have bought at correct age.
- Protects both insured and insurer from unfair pricing.
Memory trick: If your AGE is wrong, the benefits will ADJUST.