Under the misstatement-of-age provision of 40 P.S. § 510(e), what does an insurer do when an insured's age was misstated in a Pennsylvania life policy application?

Why A is correct

40 P.S. § 510(e) provides that a misstatement of age does not void a Pennsylvania life policy; instead, the benefit is adjusted to what the premiums actually paid would have purchased at the insured's true age. The rule treats the error as a pricing problem rather than a fraud problem in the ordinary case: the insurer receives exactly what the correct-age premium would have bought. The Pennsylvania Insurance Department's examination outline pairs this with the incontestability provision to show that age errors survive even after the contestable period, but only in adjusted-benefit form.

Why the other options are wrong

• B) Voiding the policy is the remedy for contestable misstatements within the two-year window of 40 P.S. § 510(c); age misstatement has its own non-voiding remedy under 40 P.S. § 510(e).
• C) The statute does not let the insurer collect a retroactive premium catch-up; it simply reprices the benefit the premiums would have bought.
• D) Paying the stated benefit ignores the misstatement and overpays; the statutory remedy adjusts the benefit to the correct-age equivalent.

Memory hook

Wrong age, right price: reprice the benefit, never void the policy.