Which provision addresses misstatements of age or sex in annuity contracts?

Which provision addresses misstatements of age or sex in annuity contracts?

• A. Survivorship provision
• B. Grace period provision
• C. Incontestability provision
• D. Misstatement provision

Answer: (D)

The provision that specifically addresses misstatements of age or sex in annuity contracts is the misstatement provision. This provision is included to ensure that if an annuitant's age or sex is inaccurately reported when the contract is created, the insurance company has the right to adjust the benefits accordingly. For example, if a contract is issued based on a misrepresented age, the payout at the time of annuitization may be recalculated to reflect the correct age, which can impact both the duration and amount of the annuity payments. This provision is vital for maintaining actuarial fairness and accuracy, allowing the insurer to uphold the terms of the contract despite initial errors in the submitted information.

The provision that specifically addresses misstatements of age or sex in annuity contracts is the misstatement provision. This provision is included to ensure that if an annuitant's age or sex is inaccurately reported when the contract is created, the insurance company has the right to adjust the benefits accordingly.

For example, if a contract is issued based on a misrepresented age, the payout at the time of annuitization may be recalculated to reflect the correct age, which can impact both the duration and amount of the annuity payments. This provision is vital for maintaining actuarial fairness and accuracy, allowing the insurer to uphold the terms of the contract despite initial errors in the submitted information.