Texas General Lines — Life, Accident, Health and HMOTexas Statutes and Rules Specific to Accident, Health and HMOMedium
A health insurance policy in Texas includes a provision stating that if the policyholder misstates their age, and the correct age would have resulted in a higher premium, the insurer will adjust the benefits payable to what the premium paid would have purchased at the correct age. This provision is an example of which of the following standard policy provisions?
- AMisstatement of Age.
- BUnpaid Premium.
- CRelation of Earnings to Insurance.
- DChange of Occupation.
Show answer & explanationAnswer & explanation
Correct answer: A. Misstatement of Age.
The scenario directly describes the function of the Misstatement of Age provision. This clause allows the insurer to adjust benefits or premiums if the insured's age was incorrectly stated on the application, ensuring that the coverage aligns with the premium paid for the correct age.
Why the other options are wrong
- B. Unpaid Premium addresses the consequences of a policyholder failing to pay premiums, typically leading to policy lapse.
- C. Relation of Earnings to Insurance deals with adjusting benefits if total disability income exceeds a certain percentage of the insured's earnings.
- D. Change of Occupation deals with changes in the insured's job affecting risk, not age misstatement.
Misstatement of Age Provision
A standard health insurance policy provision that allows an insurer to adjust benefits or premiums if the insured's age was misstated on the application, to reflect what the premium paid would have purchased at the correct age.
- Part of standard policy provisions.
- Addresses incorrect age on application.
- Adjusts benefits or premiums, not voids policy.
Memory trick: Don't 'misstate' your 'age', or your 'benefits' will 'change'.