Misstatement of Age or Sex 誤報年齡或性別

Purpose of the Provision 條款的作用

Age and sex directly affect mortality and life expectancy, so they are basic rating factors for life insurance and annuities. If either is wrong, the premiums paid do not match the risk the insurer carries.

The misstatement of age or sex provision sets out the remedy in advance: the difference is corrected by adjusting the benefit or the premium, rather than ending the cover because of the error. Beneficiaries do not lose all protection because of an error that can be calculated, and the insurer is not left short of the premium it should have received.

A misrepresentation in general can make a contract voidable. An error in age or sex is different because its financial effect can be measured precisely, so it is normally dealt with by adjustment under this provision.

How the Adjustment Works 如何調整利益

If the error comes to light at the time of a claim, the insurer normally pays the amount that the premiums paid would have bought at the correct age and sex. The usual formula is: adjusted sum insured = original sum insured × premium paid ÷ correct premium.

Example: the sum insured is HK$1,000,000 and the annual premium is HK$10,000. If the premium at the true age should have been HK$12,500, the adjusted sum insured is HK$800,000.

If an understated age (premiums too low) is found while the life insured is alive, the policyholder can generally pay the shortfall, usually with interest, or accept a proportionately reduced sum insured. If the age was overstated (premiums too high), the insurer will generally refund the excess premium or increase the sum insured accordingly. The exact arrangement depends on the policy terms.

Incontestability and Age Limits 與不可爭議條款的關係及年齡上限

The incontestability provision limits the insurer's right to challenge the validity of a policy for misrepresentation after the contestable period. Adjusting a benefit for age or sex does not challenge validity; it only calculates the correct amount payable. It can therefore generally be made even after the contestable period has ended.

The main exception is where the true age is outside the product's insurable age range. The insurer would never have accepted the risk at that age, so there is no correct premium on which to base an adjustment. It can generally treat the policy as void and refund the premiums paid instead of adjusting the sum insured.

Proof of Age and Annuities 年齡證明及年金

The insurer may ask for proof of age at application or, at the latest, when a claim is made. Common documents include a birth certificate, a Hong Kong identity card and a passport. Verifying age early and recording it on the policy helps avoid a dispute at claim stage.

Annuities work in the opposite direction from life insurance because they cover longevity risk. A person with a shorter life expectancy receives a higher annuity instalment, so overstating age or wrongly recording a woman as a man will usually make the instalments too high. Once this is discovered, the insurer will generally adjust them to the correct level and may deal with any overpayment according to the policy terms.