LLQP Accident & Sickness · Component 2.1 · 30% of the exam
A disability policy's 'misstatement of age' provision provides that, if the insured's age was wrong at issue:
- The benefit is adjusted to the amount the premium would have purchased at the correct age
- BThe insurer may refuse the claim entirely, since age is a material fact on every application
- CThe premium is corrected going forward and the shortfall is recovered from the first benefit
- DThe contract is void from the beginning and all premiums paid are refunded to the owner
Correct answer: A) The benefit is adjusted to the amount the premium would have purchased at the correct age
Age errors are handled by adjustment rather than avoidance, so the insured receives the coverage actually paid for instead of losing the contract altogether.
Why the other options are wrong
- BRefusal is not the remedy the provision prescribes.
- CThe adjustment falls on the benefit rather than on future premiums.
- DAn age error does not void the contract.
Exam tip
Age errors adjust the benefit, not the contract's validity.
Common mistake
Telling a client an incorrect birth date will void the policy.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Accident & Sickness module. Written against the published curriculum.
More from component 2
- A group benefits booklet lists AD&D coverage alongside life and LTD. The AD&D benefit pays:
- A hospital indemnity (hospital cash) policy pays:
- Employment Insurance sickness benefits are available to:
- Which government program coordinates with an individual DI policy through a possible offset AND also affects the definition of insurable income?
- A group plan's 'eligibility waiting period' (probationary period) is:
- A CI policy that is 'convertible' allows the insured to:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.