If the error as to the age is discovered by the insurer prior to the insured’s death, either premiums or coverage can be adjusted. Usually, if the insured’s age was higher than stated in the application, the insurer will allow the policy owner to pay the difference in premiums (with interest) and keep the original policy or it may issue a new policy with the lower death benefit with the original premium level. If the insured was younger than stated in the application, the insurer will almost always refund the excess premiums (often with interest).
Reproduced with permission. Copyright The National Underwriter Co. Division of ALM