An employee covered under a $100,000 group life certificate stated their age as 40 at enrollment, but their correct age was 45. When the employee dies, under California Insurance Code Section 10369.3 the insurer will:

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.