Tennessee Insurance Practice Exam 2025 – All-in-One Resource for Exam Success!

If it is discovered that L understated her age on the insurance application after her death, the insurer will likely adjust the death benefit. Insurance premiums and benefits are often calculated based on the applicant's age at the time the policy is issued. If the age was understated, this could mean that the policy was issued at a lower premium rate than would have been charged had the correct age been disclosed.

The insurer typically recalculates the death benefit based on the appropriate age and the corresponding premium rates. For instance, if L had disclosed her correct age, the policy would have provided a different (usually lower) benefit amount, reflecting normal underwriting practices. Therefore, upon discovering the age misinformation, the company would adjust the death benefit to align with the premiums that should have been paid had the correct age been disclosed, rather than taking more drastic measures like canceling the policy or enforcing a waiting period.