What defines a misstatement?

Interesting scenario. I would assume that provided you are not in the 2 year contest period and they were truthful at the time of application there would be coverage.

Hopefully the client has kept good documentation of their transition.

As regards policy updates I would simple submit a policy change request and explain to policy service the situation. I don’t think I’d hold my breath for a rate change.😉

Good Question !  I don't believe a change in gender after the fact is a
misstatement as long as when the application was signed the correct gender was listed as such even w/in the two year contestability period; but if the agent is aware of the gender change, to be safe I would discuss with carrier confidentially how they handle such matters just to protect yourself.

First:  I am not an insurance professional and are therefor NOT qualified to answer your great question.  However, I can provide an opinion, but that's all that it is.  1)  If the person is of one gender at the time the policy is written and they accurately report that gender at the time, there is no mis-statement.  It would be difficult to prove that the person was intending to become another gender, if there were no medical notes indicating so (which would have been captured elsewhere on the forms.)  2)  the protocol would be the same as updating other information on the form.  The reasons, requirements and procedures for updating the forms are typically clearly indicated.  There should be no protocol change - this change is just like any other change.

Any changes to original application when gender is incorrect will require amendments to the policy, because female rates are lower than male. If Male changed gender to female through operation or choice, usually the gender they are is whats on their birth certificate. Insurance companies usually rely on male and female mortality rates, sex and health of an individual to come up with rates.

Listen to your underwriter; that opinion, by company, is the only one that matters..

If you gave your correct gender at the time of application, your policy is written and rated from your current gender, health, and physical condition. There is nothing in the policy that states that if you change gender that it will effect your beneficiary from receiving the death benefit. Best thing is to verify with the insurance company that is writing the policy prior to purchasing the policy to be certain. Each company has their own underwriting guidelines.

At the time of taking the application you report their gender that they claim to be. If you see anything contrary to what they are saying, you have a duty to add that to the agent report. Failure to do that, can be E&O issue.

2. In the course of the process or after issue if the insured to you of a change in Gender. Contact sales support and inform them of it and ask for your next steps to make the changes..

The underwriters will underwrite them with what they were born with and it will stay that way, regardless of anything else. That's just life.

I can not speak to this particular issue.  However, we have seen claims where a misstatement of age occurred. The year of birth was an error on a paper application, yet signed by the applicant.  

In this situation, underwritng adjusted the premiums, paid the claim, and sent refund for the excess premium.

The client is under an obligation of full disclosure and truthfulness when completing the application. As conditions change, he does not have the same requirement to update the information.  Someone newly diagnosed with HIV has no responsibility to tell the insurer. Someone who begins using medical marijuana when he was rated as a non smoker has no obligation to tell the change to the insurer.