State RegulationsNY specificDifficulty 1/5
The age of an insured is misstated in a New York life insurance application. Under the required misstatement of age provision, the effect is:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §3203(a)(5), a misstatement of the insured's age does not void the policy; the amount payable is adjusted to the amount that the premiums paid would have purchased at the true age. The provision protects both parties: the insurer pays no windfall, and the beneficiary still recovers under the contract.
Why the other options are wrong
- A) Misstatement of age does not void the policy under New York's required provision; the coverage remains in force.
- C) The insurer is not required to cancel and refund; the policy stays in force with the benefit adjusted.
- D) Paying the full stated benefit would grant a windfall the premiums never purchased.
Memory hook
Wrong age? Recalculate the benefit the premiums would have bought.