Loading…
During a policy review, Teresa's agent notices that her 20-year term application gave her age as 35, but her passport shows she was 38. She pays $600 a year for $150,000, based on the age-35 rate of $4.00 per $1,000; the age-38 rate was $4.80. The contract follows the statutory rule. What death benefit does the policy now provide?
Under s. 54(2), the insurance money is adjusted to what the premium actually paid would have bought at the correct age: $600 ÷ $4.80 × $1,000 = $125,000. The rule applies whenever the error is found, not only at a claim. $150,000 ignores the rule, $180,000 adjusts in the wrong direction, and $0 treats the error as a misrepresentation that voids the policy; misstated age is excluded from the misrepresentation rules by s. 52(1)(a). Source: Insurance Act (BC), RSBC 2012, c. 1, s. 52(1)(a) and 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).
Voiding the policy, or adjusting in the wrong direction, when age was understated.
Practice more Life Underwriting, Application & Policy Provisions questions
Exam-style questions with worked answers, then full timed mocks. Free to start.
Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.
Start practicing →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.