A covered employee's age is misstated on a group life certificate, and the misstatement is discovered after a claim. Under California's standard age misstatement provision (Insurance Code Section 10369.3), the amount payable is:

Why A is correct

California Insurance Code Section 10369.3 provides the standard age misstatement adjustment: if the insured's age has been misstated, all amounts payable under the policy shall be the amount that the premium paid would have purchased at the correct age. In other words, the death benefit is adjusted proportionally to what the actual premium would have bought if the correct age had been disclosed. This protects the insurer from paying a benefit larger than the premium reasonably purchased and prevents a windfall from misstatement.

Why the other options are wrong

• B) Misstatement of age does affect group claims. Section 10369.3 requires the death benefit to be recomputed so that it reflects what the premium paid would have purchased at the correct age.
• C) The misstatement provision adjusts the benefit amount; it does not void the coverage. Neither does it reduce the claim to a mere refund of premiums paid.
• D) No penalty of double the face amount exists. The remedy is the proportional adjustment to the amount the premium would have purchased at the correct age.

Memory hook

Age misstatement = resize the benefit. Pay what the premium would have bought at the true age, nothing more.