James is the insured on a life insurance policy where his age was misstated on the application. What is CORRECT regarding the death benefit amount?

When there is a misstatement of age on a life insurance application, the policy's terms allow for adjustments in the benefit amount based on what the premiums would have purchased had the correct age been stated. This means the insurer will determine the death benefit amount based on the actual age of the insured and adjust it according to the premiums that would have been required for that age.

This approach ensures that the death benefit accurately reflects the risk associated with the insured's age. Insurers calculate premiums based on the likelihood of payout at various ages, and a younger applicant generally pays lower premiums than an older one because of the higher life expectancy. By basing the death benefit on what the correct premiums would have provided, the insurer maintains fairness in regard to risk assessment and ensures that the policy remains in alignment with actuarial practices.

The other options do not accurately reflect how misstatements of age are handled in life insurance. The full amount wouldn't be payable unless the insured was indeed the correct age since it would overlook the increase in risk that age misstatement entails. A reduced amount isn't the standard outcome; instead, the benefit is adjusted based on the right premiums. Denying the death benefit altogether is also not a typical response in such scenarios. Thus, what the