1. Suppose a life insurance buyer reports his age as 42 when it is in fact 52 when buying a life policy. The buyer dies 5 years later. Which of the following best describes how the misstatement-of-age-or-sex clause will affect this situation?
   1. The insurer will not be required to pay the claim due to the misrepresentation by the insured.
   2. The insurer must pay the claim according to the amount that the premium being paid by the buyer would have purchased had the age been stated correctly.
   3. The insurer will not be able to deny the claim because the death occurred 5 years after the inception of the policy.
   4. The insurer will not be required to pay the claim because the misstatement was material enough to have affected the initial underwriting decision.