Misstatement of Age Provision

The misstatement of Age Provision is often also known as the Misstatement of Age Clause.  In many life insurance policy contracts it will be listed under Misstated Age or Misstatement of Age.  All of these terms are essentially referencing the same thing.

The misstatement of age clause is when the age, stated on a policy, is incorrect and how the insurance company will handle this issue.

The Misstatement of Age Provision is the clause contained within a life insurance policy that deals with what happens when a client misstates their age after the policy has been issued.

Unlike typical property insurance that can constantly be changed and endorsed, typically a life insurance policy is not commonly changed once the policy has been issued.   Therefore it is important to have a provision to deal with the odd occurrences of when the age was incorrectly placed on a given life contract.

Often this key provision will adjust the face value of the life insurance policy that was purchased to compensate for the incorrect age.   The misstatement of age clause is generally considered a solid consumer protection law because it prevents the insurer from outright cancelling the policy. Why would the insurer be able to cancel the policy?  Mainly because a key factor of the original life insurance policy is found to be wrong. The pricing model was incorrect. And it may be hard to prove that the age was not misstated with the purpose of qualifying for insurance either that  you did not deserve or would have paid more for.  Insurance companies could also claim, possibly, that rather than a misrepresentation that the misstatement is essentially outright fraud.   Therefore this key provision protects most consumers from this issue.

IRMI defines the misstatement of age as thus: "A provision in a life insurance policy that adjusts the amount of insurance when the insured's age was misstated on the application to the amount that the premium would have purchased at the correct age based on the insurer's rates at the date of policy issuance."

The New York Department of Financial Services defines it as such: "Misstatement of Age - The falsification of the applicant's birth date on the application for insurance. When discovered, the coverage will be adjusted to reflect the correct age according to the premium paid in."

AIG Direct's definition is much more terse: "Falsification of one's date of birth during the application process."

For the purposes of this article, let us define The Misstatement of Age Provision as the clause contained within a life insurance policy that deals with what happens when a client misstates their age after the policy has been issued. Typically the policy is not cancelled but allows for fair readjusting of the life insurance product once discovered.  Each insurer and state regulator may have a different version of this provision.

From a National Guardian Life Insurance policy: "If the age of any Insured under this Policy has been misstated, there will be a fair adjustment between the Policyholder and Us. As the basis for adjustment, We will recompute the premium for the true age of that person and the right amount of His insurance as provided by this Policy."

A Reliance Standard policy: "Dependent’s insurance is affected by the misstated age and/or tobacco use status, it will also be adjusted. The insurance coverage will be changed to the amount the Insured or the Insured Dependent is entitled to at his/her correct age and/or tobacco use status."

Liberty National Life Insurance: "If your age is misstated in the schedule, the ultimate face amount will be such as the premiums would have purchased on this plan at your correct age."

Empire Life: "If the age or sex of a Life Insured for any benefit under this policy is misstated, the proceeds payable for that benefit will be adjusted to the amount that would have been provided on the basis of the correct age or sex by the premium actually paid in respect of that benefit. If, on the basis of the correct age, the benefit would not have been available for that Life Insured, that benefit will be void and cancelled and all premiums paid for that benefit will be refunded."

To begin with, check the actual life insurance policy.  Read through the policy and the application.  This may sound obvious, but you should check the date of birth.  If the date of birth is incorrect, I would suggest that you immediately read through the policy to discover how the policy deals with a true misstatement of age situation.

Next, you may want to contact your state insurance regulator to discover if there are any specific laws regarding life insurance policies in your state with this situation.

Last, I would suggest that you reach out to the insurance company and explain the situation.  Ask lots of questions and inquire what your options are.

Relax, mistakes get made all of the time.  The misstatement of age clause is generally considered a good consumer protection.