How does the insurer handle adjustments for a misrepresented age?

When an insurer identifies that an applicant has misrepresented their age, the standard practice is to adjust the face amount of the policy according to the correct age. This means that if the actual age of the insured is older than what was stated, the insurer may reduce the death benefit to match what the premiums paid would cover based on the correct age. Conversely, if the insured is younger than indicated, the coverage may be increased. This approach ensures fairness in the contract, as life insurance premiums are calculated based on the insured's age at the time of policy issuance. Consequently, adjusting the face amount reflects the insurer's original underwriting decision based on accurate information.

In instances where the misrepresentation is significant, the insurer might consider terminating the policy, but the typical outcome is an adjustment of benefits rather than voiding the contract outright or permanently raising premiums without cause. Thus, altering the face amount according to the correct age is the most equitable solution and maintains the contractual integrity for both parties.