Under a California group life insurance policy, if the insured's age was misstated at the time coverage began, the insurer will:

Why A is correct

Under California Insurance Code Section 10369.3, when a group life insured's age has been misstated at the time coverage began, the amount payable is adjusted to the amount that the premiums paid would have purchased at the correct age. The coverage is not voided; instead, the death benefit is proportionally recalculated so the insurer neither overpays nor underpays. This age-adjustment rule mirrors the principle applied in individual life policies and protects both parties. If the correct age was older, the benefit is reduced; if the correct age was younger, the benefit is increased. The adjustment is made at claim time using the premiums actually paid.

Why the other options are wrong

• Age misstatement does not void the coverage; the policy remains valid and the benefit is merely adjusted.
• The adjustment operates on the death benefit at claim time; it does not operate by reducing future premiums.
• The full face amount is payable only when the stated age was correct; a misstatement triggers a proportional adjustment.

Memory hook

Wrong age = benefit adjusted to what your money would have bought at the true age. No void, just a recalculation.

Why A is correct

The misstatement-of-age provision (CIC §10369.3) states that if the insured's age was misstated, all amounts payable shall be such as the premium paid would have purchased at the correct age. In other words, the insurer scales the death benefit to what the paid premium actually buys at the true age — the family gets no windfall, and the policy is not voided. This is a correction mechanism, not a penalty: the policy remains valid, the face amount is adjusted, and there is no premium refund for the beneficiary.

Why the other options are wrong

• B) Age misstatement does not void the policy. The provision adjusts the benefit amount so the family receives no windfall from the age error.
• C) The full face amount is not paid. The benefit is recomputed as if the correct age had been used at issue, based on the premium actually paid.
• D) No past premiums are refunded to the beneficiary. The correction operates on the amount payable at death, not by refunding premiums.

Memory hook

Wrong age, right price: the death check is recast to what the premium truly bought.

Why A is correct

California Insurance Code Section 10369.3 governs misstatement of age in group life insurance. When the insured's age is misstated, the insurer adjusts the death benefit to the amount the premium actually paid would have purchased at the insured's correct age. This protects the insurer from the risk that a misstatement understated the risk, while still providing coverage proportionate to the premiums paid. Intent is not required for the adjustment.

Why the other options are wrong

• B) Age is a primary factor in group life rate and coverage calculations; a misstatement changes the amount of benefit the premium supports.
• C) The insurer does not rescind the coverage for age misstatement; the benefit is simply adjusted to the correct-age amount.
• D) Intent does not matter under Section 10369.3; the benefit is adjusted whether the misstatement was innocent or deliberate.

Memory hook

Misstated age in group life? The benefit shrinks to what the premium actually bought; intent does not matter.