State RegulationsMI specificDifficulty 1/5
Under Michigan law, what happens when an insured's age is misstated in the application for an individual life policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.C.L. 500.4018 provides that a misstatement of age or gender does not void the policy; instead the benefits are adjusted to what the premiums actually paid would have purchased at the correct age or gender. This equitable remedy keeps the coverage alive while preventing the insured from receiving more than the premium paid for was worth.
Why the other options are wrong
- A) Age misstatement is expressly not grounds for voiding the policy; the remedy is adjustment of the benefit (M.C.L. 500.4018).
- B) The benefit is not paid exactly as written; it is recalculated for the correct age or gender.
- D) Premiums are not refunded; the policy stays in force with an adjusted benefit.
Memory hook
Wrong age? Don't void — resize the benefit.