Final answer:
If an insured person's age is misstated on a life policy, the benefits may be adjusted at the time of claim to reflect the correct age rather than canceling the policy or voiding it.
Step-by-step explanation:
When an insured person's age has been misstated on a life policy, the policy does not become void nor is it necessarily canceled, but the benefits may be adjusted at the time of the claim. The incorrect information affects the actuarial calculations that determine the premiums and potential payouts, as these rely on accurate personal data to assess risk. If the insured's age is found to be different from what was initially stated, the insurance company may adjust the death benefit to reflect what the premiums would have been at the correct age. This adjustment is to maintain the fairness and balance of the insurance process, following the principle that the average amount paid in cannot be less than the average amount paid out to the group.