Misstatement of age in health policies generally leads to what outcome?

• A. The claim is denied automatically.
• B. Premiums are refunded in full.
• C. Benefits may be adjusted to reflect the correct age or sex; the policy remains in force if not fraudulent.
• D. Coverage is terminated for misstatement.

Answer: (C)

When age (or sex) on a health policy is misstated, the insurer uses the correct information to determine the appropriate benefits and, if needed, adjust the premium. The key idea is that the policy can be kept in force, but the benefits (and possibly future premiums) are adjusted to reflect the insured’s true age and sex. This prevents paying out benefits under the wrong risk class while still honoring the coverage that was issued.

This approach makes sense because premiums and coverage levels are set based on true age and sex, so correcting the record ensures fairness and accuracy in the contract. The policy does not automatically get denied or terminated simply for a misstatement, unless the misstatement was fraudulent. Full refunds of all premiums are not standard practice, and termination isn’t the default remedy.

So, the correct outcome is that benefits may be adjusted to reflect the correct age or sex, and the policy remains in force if the misstatement was not fraudulent.