If an insurer discovers a misstatement of age on an application, what is the result?

When an insurer discovers a misstatement of age on an application, the correct result is that benefits will be adjusted according to the correct age. This principle is grounded in the concept that the premiums and benefits of a life insurance policy are often calculated based on the insured individual's age at the time of application. Therefore, if the age was misstated, the insurer has the right to modify the policy to reflect what it would have been had the correct age been disclosed initially.

Adjusting the benefits ensures that both the insurer and the insured are treated fairly. If the policyholder is younger than stated, the benefits may increase, whereas if older, the benefits could decrease. This adjustment helps maintain the insurer's risk assessment based on accurate information, ultimately ensuring the integrity of the insurance contract.

The other options do not accurately reflect the standard procedure in such situations. Voiding the policy outright would be disproportionate unless there were fraudulent intents. A simple refund of premiums is not typically applicable; rather, the adjustment of benefits is the standard remedy. Lastly, imposing a fine on the policyholder is not a common practice in cases of misstatement regarding age, as it does not address the primary concern of correcting the policy to align with the insured's actual age.