State RegulationsNY specificDifficulty 2/5
A Manhattan resident applied for a life policy and accidentally understated her age. She dies while the policy is in force, and the insurer discovers the age error when the claim is filed. Under New York law, what will the insurer pay?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §3203(a)(5), every New York life policy must contain a misstatement-of-age provision: when the insured's age is misstated, the amount payable is adjusted to the amount the premium paid would have purchased at the correct age. The policy remains in force; discovering an age error at claim time changes the benefit calculation, not the existence of coverage.
Why the other options are wrong
- A) The face amount is not paid regardless of the error; §3203(a)(5) requires the benefit to be adjusted to what the premium would have purchased at the insured's true age.
- B) An age misstatement does not void the policy; absent fraud, application statements are representations rather than warranties under N.Y. Ins. Law §3204.
- D) A refund of premiums is the remedy for certain exclusions, such as suicide within two years under §3203(b)(1)(B), not for a misstatement of age.
Memory hook
Wrong age means adjusted pay: the premium decides the benefit at the true age.