Final answer:
Whether the insurer will pay out the claim in full when Chad, who misstated his age, passes away within 11 months of the policy being in force, depends on the policy's contestability period and the nature of the misstatement. If the misrepresentation of age is deemed material and within the contestability period, the insurer may not pay in full. The outcome depends on the policy's terms and applicable law.
Step-by-step explanation:
When Chad provided incorrect age information to the insurer during the insurance application process and subsequently passed away 11 months after the policy became in force, the determination of whether the insurer will pay the claim in full depends on the policy's contestability period and the materiality of the misrepresentation. Most life insurance policies have a contestability period, typically two years, during which the insurer can dispute or deny claims based on misrepresentations or omissions made by the policyholder. If Chad's misstated age was deemed material to the risk being insured, and it fell within the contestability period, the insurer may not pay the claim in full. Instead, the insurer could adjust the death benefit based on the correct age or premiums that should have been paid. After the contestability period has passed, the insurer usually must pay out the claim regardless of the misstatement, unless the misrepresentation was fraudulent.
However, the specific outcome would depend on the terms of the insurance policy in question and the laws of the jurisdiction supervising the insurance contract. The exact provision that would apply varies based on the policy and the governing law but could relate to the contestability clause or misrepresentation provisions.