Life Underwriting, Application & Policy Provisions question: Brigid's application stated

LifeUnderwriting, Application & Policy Provisions

Brigid's application stated she was 52, and she has paid $1,200 a year for a $100,000 policy at the age-52 rate of $12 per $1,000. After her death the insurer finds she was actually 50 when she applied, when the rate was $10 per $1,000. The contract has no age limit issue. What death benefit is payable?

A $83,333
B $100,000
C $102,000
D $120,000

Show the answer and explanation

Answer: D. $120,000

The misstatement rule works in both directions: the benefit becomes what the premium paid would have bought at the correct age. $1,200 ÷ $10 × $1,000 = $120,000. $100,000 ignores the rule, $83,333 adjusts downward as if she had understated her age, and $102,000 just adds back two years of the $1,000 premium difference. Overstating age means she overpaid, so her beneficiary receives more. Source: Insurance Act (BC), RSBC 2012, c. 1, s. 54(2) (current to 6 Oct 2026); uniform life provisions in the common-law provinces; arithmetic on stated rates (as at 12 Oct 2026).

Common mistake

Assuming a misstated age can only reduce the death benefit.

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Original study material mapped to the public CISRO curriculum; not a real test question.Not affiliated with CISRO, CCIR or any provincial insurance regulator. Verify figures and rules against current guidance before relying on them.