State RegulationsPA specificDifficulty 1/5
An insured's age was misstated in the application for an accident and health policy, without any fraudulent intent. Under 40 P.S. § 753(B)(2), what is the remedy?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The misstatement-of-age-and-sex provision of 40 P.S. § 753(B)(2) treats an innocent age or sex error as a pricing correction, not a coverage kill switch: benefits are adjusted to what the premiums paid would have purchased at the correct age or sex. The policy stays in force, and the insured keeps coverage scaled to what was actually paid for.
Why the other options are wrong
- B) Voiding is reserved for fraud; an innocent age or sex misstatement results in benefit adjustment under 40 P.S. § 753(B)(2).
- C) The misstatement is not simply forgiven; the insurer recalculates the benefit to the correct age or sex class.
- D) The adjustment is automatic under the policy provision; no departmental approval process is involved.
Memory hook
Wrong age, right price: recalculate the benefit, keep the policy alive.