After an insured's death, the insurer discovers that the insured understated his age by 5 years on the original application. Under the misstatement-of-age (or sex) provision, the insurer will:

Explanation

The misstatement-of-age (and now misstatement-of-sex) provision required by California Insurance Code §10113.7 provides an EQUITABLE adjustment, not a rescission. The insurer adjusts the death benefit to the amount the premium actually paid would have purchased had the correct age been disclosed. Because life insurance premium varies with age, an understatement means the insured underpaid; the death benefit shrinks accordingly. Option B is too harsh — California treats this as an arithmetic adjustment, not contract fraud, because age is universally verifiable. Option C — billing the estate is not the chosen remedy. Option D — misstatement of age is specifically EXCLUDED from the incontestability defense; it can be used at any time, but only for arithmetic adjustment, not rescission.