2.8. Charlene (78) had a life insurance policy at Personal Insurers for the past 12 years. S passed away recently. Her executor has experienced delays in payment of the insurance proceeds from Personal Insurers. According to them, they are busy with internal investigation in whether they will be paying in proceeds as Charlene apparen at underwwiting stage, confirmed her age as 38 . Choose the correct statement. A. The policy will be void as a result of the misrepresentation by Charlene. B. The policy benefits will be adjusted as deemed fit by Personal Insurers. C. The policy will pay out as there was no material effect on the policy.
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In cases of misrepresentation regarding age in life insurance, the insurer often has a right to adjust the policy benefits. If Charlene had stated her age significantly inaccurately, the insurer could argue that this affects the risk assessment, potentially leading to an adjusted payout based on the correct age. However, if the misrepresentation was not material to the underwriting or if the premium payments were made and maintained for years without issue, the policy could still be honored. It ultimately hinges on whether the incorrect age information significantly altered the insurer's decision to underwrite the policy.
