State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insured under a group life certificate misstated his age at issue. When the insurer discovers the error, what adjustment is made?
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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 an insured's age is misstated in group life insurance, the insurer adjusts the benefit to what the premium paid would have purchased at the correct age, rather than voiding the coverage. Because premiums are set by age, the benefit is recomputed proportionally so the insurer is neither over- nor undercompensated. This equitable adjustment keeps the contract in force and is the standard remedy for an age misstatement in both individual and group life coverage.
Why the other options are wrong
- B) Voiding the policy with a full premium refund is not the statutory remedy for a mere age misstatement; the law directs an equitable benefit adjustment. The statute instead preserves coverage and applies an equitable adjustment to the benefit amount.
- C) The coverage is not automatically voided; the insurer adjusts the amount of insurance to match the premium paid at the true age. The contract remains valid and the insurer simply recalculates the coverage to the correct age.
- D) No fine is imposed on the insured by the insurance department for an age misstatement; the contract remedy is the benefit adjustment. No regulatory fine applies; the insurer's remedy is the adjustment required by the code.
Memory hook
Wrong age on file? The benefit shrinks or grows to match the premium at the true age.