[3BCV8HDX] If the insured’s age has been overstated at the tim... | Achievable Life & Health…
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Hi @Marcos_Kub.
We have reviewed the question and confirmed it is correct. When age is misstated on a life insurance application, the face amount (also referred to as the death benefit) is adjusted at the time of death to reflect what the paid premiums would have purchased at the correct age.
We also updated the textbook and quiz explanation to clarify this further.
Please let us know if you have any other questions as you continue to study. Thank you,
-Brenden
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I can’t remember the entire question or answers but I believe it said overstated which I think would imply they would pay a higher premium and should actually be provided with higher benefits at death.
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Hi @Marcos_Kub, thank you for clarifying your feedback. You’re on the right track thinking about the premiums, but the death benefit would be reduced, not increased. Since the premiums were based on the overstated age, the insurance company would adjust the death benefit to what the premiums would’ve bought for the correct age. So, it would end up being lower, not higher. Hope that helps!
Thank you,
-Brenden
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I’m reading this questions as, the applicant is really 30 years old and they overstated their age on the application as 32.
Is this correct?
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Hi @Marcos_Kub, Thank you for the clarification! My initial response was mistaken. In that case, the death benefit would be increased, not decreased. The question has been improved to reduce confusion.
Thank you,
-Brenden
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Awesome, thanks you.
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