Final answer:
Misstating age on a life insurance application can lead to a reduced death benefit or even void the policy, as age is crucial for calculating risk and premiums.
Step-by-step explanation:
Misstating age on a policy application can significantly affect the death benefit of a life insurance policy. If an applicant provides incorrect age information and the insurer discovers this after the policyholder's death, the death benefit paid out could be less than expected.
Insurers use age as a key factor in determining premiums; a younger age often results in lower premiums due to a lower expected risk of death. If the true age is disclosed after death, the insurer may adjust the death benefit based on the premiums that would have been paid if the correct age had been given initially.