State RegulationsAZ specificDifficulty 1/5
An Arizona life insured's age was misstated on the application. Under A.R.S. 20-1206, the insurer's remedy is to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A.R.S. 20-1206 requires an equitable adjustment: if the insured's age was misstated, the amount payable is what the premiums paid would have purchased at the correct age. The policy stays in force with a corrected benefit rather than collapsing, which is far gentler than the voidance approach used for contestable misstatements inside the two-year window.
Why the other options are wrong
- B) voiding the policy is not the statutory remedy for age misstatement; the remedy is adjustment.
- C) premium refunds with termination are not what A.R.S. 20-1206 provides.
- D) innocence does not preserve an unadjusted full benefit; the correction applies regardless.
Memory hook
Wrong age, right-sized benefit.