What is the definition of Misstatement of Age or Sex Provision?
The Misstatement of Age or Sex Provision states that a life insurance, annuity or health insurance policy is adjusted in order to reflect the correct sex or age.
The age or sex of a person may have been misstated during the application of the policy. These two factors are important in determining the premiums for the coverage being applied. The older a person is, the more expensive the premiums will be. Thus, if a person misstated his age at the time the policy was issued and he gave a younger age, that means that the person paid less than what he should pay for the same amount of coverage priced at his correct age. If the person provided an age higher than his actual age, he is paying more premiums than he should.
The insurance company will make adjustments once misstatement is discovered. It may ask the insured person to make up for the lacking premiums or refund the insured person the extra premium he paid. The insurance company may also adjust the policy amount to reflect the right age and the actual premiums paid.
Misstatement of age or sex can usually be adjusted even after the contestable period has passed. This is done if an honest mistake has been made, and there is an absence of fraud. If misstatement was done as an attempt to intentionally defraud or mislead, the insurance company may cancel the policy if it is within the contestable period.
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