When Linda Byrd applied for a $100,000 life insurance policy with Massachusetts General Life Insurance Company, Massachusetts General's insurance agent wrote Ms. Byrd's date of birth as "5/27/67" on the application, making her 27 at the time, instead of her actual age of 33. Ms. Byrd reviewed and signed the application, it was approved, and the policy was issued. The policy subsequently was taken over by Conseco Life Insurance Company.
Years later, after Ms. Byrd passed away, the beneficiary of the policy filed a claim with Conseco. In the course of processing the claim, Conseco learned that Ms. Byrd's date of birth had been misstated on the application, and that Ms. Byrd actually was 33 years old when the policy was issued.
Conseco sent the beneficiary a letter explaining that it was reducing the death benefit in accordance with the policy's misstatement of age provision. It then adjusted the benefit to the amount of insurance it would have issued to a 33-year-old female based on the premiums collected, and paid the beneficiary approximately $57,000.
The beneficiary sued, and Conseco moved for summary judgment.
The Policy
The policy provided:
If the age or sex of the insured has been misstated, the cash values, accumulation account and death benefit payable will be that which the most recently monthly deduction would have purchased at the correct age and sex.
Colorado Law
Colorado law requires that all life insurance policies include a misstatement of age provision providing that:
If the age of the insured is misstated, the amount payable under the policy shall be such as the premium would have purchased at the correct age.
