State RegulationsFL specificDifficulty 2/5
An employee's age was misstated when his Florida group life coverage took effect, and he dies while insured. What is the effect on the death benefit?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under the standard misstatement-of-age provision in Florida group life policies (Chapter 627, Florida Statutes), a misstatement of age does not void the coverage. The insurer adjusts the benefit to the amount the premiums actually paid would have bought at the insured's correct age. If too much premium was collected the excess is refunded, and if too little was collected the benefit is scaled down - the coverage stands, only the arithmetic changes.
Why the other options are wrong
- A) A misstatement of age is treated as an arithmetic adjustment of the benefit, not as grounds to void the coverage.
- C) Denying the claim and refunding premiums is not the remedy the misstatement-of-age provision provides.
- D) The employer is not liable for any shortfall; the death benefit is simply recomputed at the correct age.
Memory hook
Wrong age = wrong amount, not wrong coverage.