Final answer:
If a misstatement of age is found during a life insurance claim, the insurance company adjusts the benefit based on the correct age. For an understated age, the benefit is reduced; for an overstated age, benefits may increase or excess premiums may be refunded.
Step-by-step explanation:
When it is discovered that a misstatement of age has occurred during the processing of a life insurance claim, the insurer generally adjusts the benefit amount based on the correct age. If the insured's age was understated, the insurance company will typically reduce the benefit payout since premiums paid would have been lower than they should have been for the correct higher age. Conversely, if the age was overstated, the insurer may refund the excess premium paid or increase the benefit amount proportionally. This adjustment ensures that the payout reflects what should have been paid in terms of premiums for the correct age, maintaining actuarial fairness.