Question

Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit be calculated?

- A) Based on the understated premium
- B) Using the correct premium rate
- C) Calculated without adjustment
- D) Based on Jerry's original age

Answer 1

The adjusted death benefit will be calculated using the correct premium rate of $15 per $1,000 of insurance.

Step-by-step explanation:

The adjusted death benefit will be calculated using the correct premium rate, which is $15 per $1,000 of insurance. Although Jerry understated his age and paid a lower premium, the insurance company will still calculate the death benefit based on the correct premium rate. This ensures that the payout is fair and accurate.