L&HPennsylvaniahard
A PA life policy is in its 18th month when the insured dies by suicide. The application contained an unintentional material misstatement of age. Under PA's mandatory provisions, which outcome is most accurate?
AClaim is fully paid because incontestability bars all defenses after issue.
BClaim is denied because the suicide clause within two years voids all coverage entirely, and the insurer may also fully rescind the policy due to the unintentional material misstatement of age without any obligation to adjust or refund premiums paid.
Insurer may invoke the suicide clause (death is within 2 years) and adjust the death benefit for the misstatement of age, generally limiting payment to a return of premiums adjusted to the correct age.
DClaim is paid in full because misstatement of age cures the suicide exclusion.
Why this is the answer
Within the 2-year suicide window, the insurer's liability is generally limited to a refund of premiums. The misstatement-of-age provision separately adjusts any benefit to what the premium paid would have purchased at the correct age, so the refund is computed accordingly.
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