Florida Life and Health Insurance License Practice Test

What happens with a life insurance claim if the insured's age was misstated?

1. Claim is denied

2. Premiums are refunded

3. Proceeds reduced based on correct age

4. Full claim is paid regardless

The correct answer is: Proceeds reduced based on correct age

In a life insurance policy, premiums are usually based on the age of the insured, so if the age is misstated, the premiums paid may not reflect the accurate risk to the insurer. As a result, the policy benefits may be adjusted to reflect the correct age, which could result in a reduction of the proceeds paid out for a claim. This is why option C is the correct answer, as the proceeds would be reduced based on the correct age. Option A is incorrect because a misstated age alone does not automatically result in a denial of the claim. Option B is incorrect because premiums are not refunded in this scenario. Option D is also incorrect because the full claim amount may not be paid out due to the adjusted benefits based on the correct age.