Under a California group life insurance policy, if the insured's age was misstated at the time coverage began, the insurer will:
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Answer & full 3-part explanation (select an option above, or peek)
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.