If the insured's age was understated, suppose he said he was 40 but was really 50 (remember the younger someone is, the lower the premium would be), most policies and state laws enable the insurer to reduce the death benefit. The company provides the same amount of death benefit as the insured would have received for the same premium.

If he said he was 40 years old, and at age 40 a $500 premium would have bought a $50,000 policy, but he was really 50, and that same $500 premium would have purchased only a $32,335 policy, if he dies the beneficiary would get only the lower amount. Unlike other material misrepresentations, it doesn't matter when the insurer learns about it -- the 2 year incontestable provisions do not apply to age.