If Mr. Dela Cruz misstated his age in the application, what happened when he died?

When Mr. Dela Cruz misstated his age in the application, the principle of "age adjustment" applies. Insurance companies use the age of the insured at the time of application to determine premiums and coverage amounts. If the actual age is different from what was stated, the insurer may adjust the benefits accordingly.

In this case, if Mr. Dela Cruz misrepresented his age, the company would likely pay out a reduced amount that correlates with his actual age at the time the contract was signed. This reduction in payment reflects the risk assessment and underwriting guidelines the insurer relied upon when determining the policy terms. Essentially, the benefit amount would be adjusted based on the premiums that would have been charged had the correct age been disclosed. Therefore, the company pays a benefit amount that corresponds to the correct age, reflecting the calculated risk associated with insuring someone of that age and often results in a decreased payout since older individuals typically represent a higher insurance risk.