LLQP Life Insurance · Component 4.2 · 10% of the exam
The insured's age was understated on the application. At the claim, the insurer will typically:
- Adjust the death benefit to the amount the premium paid would have purchased at the correct age
- BVoid the policy and refund the premiums, since the age was a material fact on the application
- CRefuse to pay and keep the premiums, since the misstatement was the applicant's responsibility
- DPay double the face amount, since the insured was younger than stated and the insurer overcharged
Correct answer: A) Adjust the death benefit to the amount the premium paid would have purchased at the correct age
Misstatement of age is handled by adjustment, not avoidance: the benefit is recalculated to what the premiums would have bought at the true age. That is why proof of age is a standard claim requirement.
Why the other options are wrong
- BMisstatement of age does not void the policy.
- CThe insurer does not keep the premiums and refuse; it adjusts the benefit.
- DThere is no double payment.
Exam tip
Age misstated → benefit adjusted to what the premium would have bought at the true age. That is why proof of age is required.
Common mistake
Believing a wrong birthdate voids the contract.
What this tests
CISRO competency component 4.2 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Life Insurance module. Written against the published curriculum.
More from component 4
- After a policy is reinstated, the contestability period:
- A revocable beneficiary designation is changed by:
- A client asks the agent to hold the beneficiary change form 'until next week' and dies in the meantime. The consequence is that:
- A client wants to reduce the face amount of her policy because her needs have fallen. The agent should note that:
- A client is unable to pay premiums temporarily on a whole life policy. Before letting it lapse, the agent should suggest:
- A client's term policy is being replaced with a new one from another insurer because it is cheaper and he remains healthy. To protect the client, the agent should ensure that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.