Montana State Life Insurance Exam 2025 – 400 Free Practice Questions to Pass the Exam

When an insured's age is misstated on a life insurance policy, the insurer will calculate the payout based on the correct age of the insured at the time of their death. This ensures that the benefits provided align with the risk associated with the actual age, as underwriting decisions often depend heavily on an insured's age.

Life insurance premiums and coverage amounts are typically determined using age as a key factor in risk assessment. If an insured is older than stated, they may have paid lower premiums based on the incorrect age, which could result in a lower coverage amount being paid out. Conversely, if the insured is younger than indicated, the insurer might adjust the payout upward to reflect the correct risk profile.

By utilizing the correct age, the insurer can ensure that payouts are fair and commensurate with the terms of the policy and the associated risks that were underwritten. This approach emphasizes the importance of accurate information in life insurance underwriting and policy administration.