What is the potential result of an insured misstating their age at the time of application for a life insurance policy?

When an insured misstates their age on a life insurance application, the most significant potential result is an adjustment in the amount of the death benefit. Insurance companies calculate premiums and benefits based on the applicant's age, as younger individuals generally pay lower premiums and have a longer life expectancy compared to older applicants. If an insured’s age is misstated, the insurer may adjust the death benefit to correspond with the correct age.

For example, if a younger person inaccurately claims to be older, the insurer may issue a policy with a lower death benefit than would have been provided for their actual age. Conversely, if an older individual claims to be younger, the insurer might issue a higher benefit than what would have been structured had the correct age been disclosed.

This adjustment ensures that the policy aligns with the risk profile based on the accurate age, maintaining fairness in the system. Therefore, option B accurately reflects the implications of a misstated age in the context of life insurance policies.