What must an insurer do when an error is made under the Misstatement of Age provision?

When an error is made under the Misstatement of Age provision, the insurer is required to pay age-corrected benefits. This means that if a policyholder has misstated their age, the insurer will adjust the benefits and any payouts based on what the policy benefits would have been if the correct age had been provided at the time of underwriting.

The Misstatement of Age provision is designed to prevent issues that may arise from providing inaccurate age information, which can affect the risk assessment during underwriting and the calculation of premiums. By paying age-corrected benefits, insurers ensure that policyholders receive the appropriate compensation that corresponds with their actual age, maintaining fairness and equity in the insurance contract.

This approach also helps to reinforce the principle of actuarial fairness, ensuring that premiums and benefits are aligned with the risk posed by the insured's actual age. Consequently, this provision safeguards both the insurer's financial stability and the insured's rightful claims based on the correct information.