In case of misstatement of age, what occurs?

When a misstatement of age occurs in an insurance policy, it generally results in the adjustment of the amount of insurance to reflect what the premiums paid would have purchased at the correct age. This means that if the insured has declared an age that is incorrect, the insurance company will calculate the benefit amount based on what premiums corresponding to the correct age would afford.

This approach ensures that the insurer maintains fairness and equity in the contract. For instance, if a person states that they are younger than they really are and pays premiums based on that lower age, the insurance company is essentially receiving higher payments based on a lower risk profile. If the true age indicates a higher risk, the coverage amount will be adjusted down, reflecting the actual cost of insuring the individual at their true age.

In terms of the other options, cancelling the policy and issuing a new one would not be practical or fair as it disrupts the continuity of coverage and may not serve the best interests of the policyholder. Changing the insured also does not address the misstatement of age issue directly. Lastly, stating that the policy remains in force and cannot be contested does not align with standard practices regarding age misstatements; typically, actions are taken to adjust the coverage based on accurate information rather