What Does A Misstatement Of Age Clause Mean For Cheap Life Insurance?

By Patrick Cooper Posted in Life Insurance News

When applying for a life insurance policy, it is absolutely critical that all the information presented on the policy is done in a completely accurate manner. This is not to say that mistakes do not happen as they frequently do. People are human and prone to making errors and minor mistakes. Outright falsehoods, however, are not minor mistakes and they can lead to serious problems down the proverbial road. The issue of a misstatement of age on a life insurance policy can have serious or minor consequences depending upon the reaction to the misstatement and the circumstances around it.

Insurance Company Reaction

In some instances, the reaction to the discovery of a misstatement of age on a life insurance policy can involve a basic combination of redaction and revision. Basically, the policy would be revised based on the correct data and modified as such. If five years have to be added to the person’s age then the monthly premiums will be adjusted accordingly and the payoff amount of the policy may be modified as well. Also, the increase on the monthly premiums may be made retroactive. That is, if the monthly premium is increased by $100 a month and the policy is already two years old, a bill of $2,400 may be presented to maintain the policy. Yes, that is a heavy fee but such is the price one must pay when a misstatement of age has been presented.

Insurance Policy Is A Contract

Never lose sight of the fact that a life insurance policy is – at its core level – a contract. When false statements are purposely presented on a contract it can be rendered invalid. Actually, this can be the case even when a simple error is the cause of the false state. That is why it is necessary to avoid making age misrepresentations on a life insurance contract. Such actions can prove wildly problematic for both the insurer and insured.

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