What happens to the death benefit if a policyholder's age was misstated?

When a policyholder's age is misstated on an insurance policy, the impact on the death benefit is typically that the proceeds are adjusted based on the accurate age at the time of the policy's issuance. This is crucial because life insurance premiums are often determined based on the insured's age; older individuals usually pay higher premiums due to the increased risk associated with their age.

If the policyholder's age is found to have been misstated, the insurance company will recalculate the death benefit to reflect what the premiums would have been had the correct age been reported. For example, if the policyholder were younger than stated, the benefits might be increased to what they would have been for that accurate age. Conversely, if the policyholder were older than reported, the benefits could be reduced. Therefore, the correct response to the situation is that the proceeds are adjusted according to the policyholder's true age. This procedure ensures fairness and adherence to the underwriting guidelines established at the time the policy was purchased.