Exclusions and Other Provisions

Randy drives racecars and scuba dives in his spare time. Will he be able to purchase life insurance with these types of hobbies?

He will be able to purchase insurance, but the premiums will be higher to compensate for the additional risk. The correct answer is: He will be able to purchase life insurance but his premiums will be higher.

An insured commits suicide while the suicide clause is in effect. What will the insurer do?

If the insured commits suicide while the suicide clause is in effect, the insurer will not pay the death benefit. Instead, the insurer will return the premiums to the beneficiary. The correct answer is: Return all premiums to the beneficiary

George bought a $300,000 whole life policy when he was employed as a bank teller. Four years later, he changes jobs and begins working in a coal mine. If he is killed while working in the mine, what will the insurer do?

The insurer will pay the claim. If an exclusion or limitation was not placed on the insured's application upon policy issuance, the insurer will be required to pay the claim. The correct answer is: Pay the claim

Chuck is in the military. How does this affect payment of the death benefit on his life policy?

His policy will exclude death while on active military service. The correct answer is: His policy excludes death while on active military service.

What happens if an insured commits suicide 3 years after the policy inception?

If the insured commits suicide more than 2 years after the policy is in place, the insurer will pay the death benefit. The correct answer is: The death benefit is paid.

What would an insurance company do if an insured commits suicide within the contracts contestable period?

The insurer would deny the claim due to the Suicide Clause. The correct answer is: Deny the claim due to the suicide clause

Mr. Brown committed suicide during the suicide clause of his insurance policy. The insurance company will:

If the insured commits suicide while the suicide clause is in effect, the insurer will not pay the death benefit. Instead, the insurer will return the premiums to the beneficiary. The correct answer is: Return all premiums to the beneficiary

All of the following statements are false regarding who may make modifications to a life insurance policy, EXCEPT:

Modifications are policy changes and must be made by an authorized officer of the insurer and attached to the policy. Only the policyowner has the right to request changes. Insurance producers cannot make any policy change. Changes to the policy can only be implemented by an executive officer of the insurer. The correct answer is: Changes to the policy can only be implemented by an executive officer of the insurer.

In addition to being a commercial pilot, Michael also flies his own private small plane. What will most likely happen when he applies for life insurance?

Most insurance companies do not deny coverage if a person is involved in aviation. They charge a higher premium to balance the added risk. The correct answer is: He will be charged a higher premium to compensate for the added risk.

How long is the suicide clause typically in effect?

The suicide clause is typically in effect for two years from the policy effective date. The correct answer is: Two years from the policy effective date