How is a misstatement of age or sex resolved after a claim has been paid?

• A. Deny the claim
• B. Adjust the death benefit to the amount the premium would have purchased at the correct age/sex, and may refund or charge the difference
• C. Cancel the policy and require a new policy
• D. Pay the full face amount regardless of misstatement

Answer: (B)

When age or sex is misstated on a life policy, the contract includes a provision that allows adjusting the benefit to reflect the insured’s true characteristics. After a claim has been paid, the insurer recalculates the death benefit using the premium that would have been charged for the correct age and sex. The goal is to align the payout with the actual level of risk. If the misstatement means the insured’s premiums were higher than what the correct age/sex would require, the insurer may refund the excess; if the premiums paid were lower, the insurer may charge the difference. This keeps the payout fair and tied to the true risk, rather than simply denying the claim, canceling the policy, or always paying the full face amount regardless of misstatement.