What occurs under the misstatement of age provision when the insured's age is misstated on a life insurance policy application?

When a misstatement of age occurs on a life insurance policy application, the correct approach is to adjust the benefits based on what the premiums would have purchased if the age had been accurately stated. This means the insurer will calculate the coverage amount that corresponds to the premiums collected for the incorrect age compared to what would have been paid had the insured's actual age been reported.

Life insurance premiums are typically determined by age, among other factors. If the insured's age is underestimated, they would have paid lower premiums than what would have been required for their actual age. Therefore, the insurer makes a necessary adjustment to ensure that the benefits align with the premiums paid. Rather than canceling the policy or denying benefits entirely, the adjustment ensures that the policy remains in force while aligning the coverage with the correct actuarial values based on the actual age.

This provision ensures fairness to both the policyholder and the insurance company, allowing the policy to remain valid without penalizing the insured for an innocent mistake in age reporting.