What happens if a life insurance policy is misstated?

If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies? A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age. Loans obtained by a policyowner against the cash value of a life insurance policy...

What is a misstatement of age in life insurance?

A misstatement of age is a provision in some life insurance policies that allows the insurance company to adjust the policy if they later find out that the insured didn’t provide them with the correct age at the time of policy purchase. The age of an individual plays a big role in how much life insurance will cost to cover them.

What happens if an insurance company misstates age?

If an insurance company discovers that an insured didn’t state the correct age on their application after they’ve died, they could deem the misstatement fraud and cancel the policy. That would leave the policy beneficiaries without any money from the policy, despite the fact that the policy owner had continually made premium payments.