LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
At claim the insurer discovers the insured was three years older than stated on the application. Under the misstatement of age provision the insurer will:
- Apay the full benefit and bill the estate for the additional premium that was owed
- Btreat the policy as void from the beginning and refund every premium received
- adjust the benefit to what the premiums paid would have purchased at the true age
- Ddeny the claim entirely because the application contained inaccurate information
Correct answer: C) adjust the benefit to what the premiums paid would have purchased at the true age
Age is handled by a specific provision rather than by rescission. The benefit is adjusted to reflect what the premium actually paid would have bought at the correct age, and the provision survives beyond contestability.
Why the other options are wrong
- AThe adjustment is made to the benefit, not collected from the estate.
- BThe contract is not voided for a misstatement of age.
- DAge misstatement leads to adjustment rather than denial of the claim.
Exam tip
Age misstatement adjusts the benefit and applies even after contestability.
Common mistake
Treating a misstated age as ordinary misrepresentation allowing rescission.
What this tests
CISRO competency component 1.6 — Integrate into practice the legal aspects of insurance and annuity contracts — which is weighted at 60% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 1
- An 'assignee' of a life insurance policy is:
- A corporation as policyowner and beneficiary of a policy on a key employee:
- A 'trustee' named to receive proceeds on behalf of a beneficiary:
- The 'automatic premium loan' (APL) provision:
- A life insurance contract 'matures' when:
- The 'assignment' provision typically states that:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.