After an insured's death, the insurer discovers that the insured's age was misstated on a New York life insurance application. Under the misstatement of age provision required by N.Y. Ins. Law §3203(a)(5), the insurer will:

Why A is correct

Under N.Y. Ins. Law §3203(a)(5), every life insurance policy must provide that if the insured's age was misstated, the amount payable is the amount that the premiums paid would have purchased at the correct age. Misstatement of age therefore changes the benefit, not the validity of the policy: if the insured was older than stated, the death benefit adjusts downward, and if younger, it adjusts upward. This equitable adjustment is a required provision in every New York life insurance contract.

Why the other options are wrong

• B) Misstatement of age does not void the policy or trigger a refund of premiums; it merely adjusts the benefit to what the premiums would have bought at the true age.
• C) Incontestability does not convert a misstated age into the full stated face amount; the benefit still adjusts to the correct age.
• D) No statutory penalty applies; the adjustment is a recalculation of the benefit based on the correct age, not a fine for each year of error.

Memory hook

Wrong age, right math: pay what the premium would have purchased at the true age.