Ch 5 pt3 EXCLUSIONS AND OTHER PROVISIONS

He will be able to purchase life insurance but his premiums will be higher.

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.

Pay the claim

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.

Two years from the policy effective date

How long is the suicide clause typically in effect? The suicide clause is typically in effect for two years from the policy effective date.

He will be charged a higher premium to compensate for the added risk.

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.

Individual who dies while flying in a commercial aircraft as a fare-paying passenger

The aviation clause excludes all of the following accidents, EXCEPT: The aviation exclusion states that the insurer will not pay the claim if the insured dies due to involvement with aviation, such as a military pilot flying a jet aircraft. Individuals flying in commercial aircraft as fare-paying passengers would not be excluded from coverage.

His policy excludes death while on active military service.

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.

Return all premiums to the beneficiary

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.

2 years

To prevent individuals intending to commit suicide from purchasing life insurance, policies include a suicide clause. How long is the suicide clause in effect. The suicide clause specifies that if death is by suicide during the first two years, no death benefit is paid.

Medical examination and autopsy

Which provision in a life insurance policy provides the insurer with the right of medical examination and autopsy? Insurers may require the proposed insured undergo a medical examination prior to issuing coverage at the insurer's expense, if necessary, such as for large amounts of coverage. The insurer may also request a deceased insured to undergo autopsy for good cause, if not prohibited by state law, while a claim is pending.

Return all premiums to the beneficiary

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.

Modifications

All of the following are types of life insurance policy loan and withdrawal provisions, EXCEPT: There are three types of policy loan and withdrawal provisions for life insurance policies: cash loan, automatic premium loan (APL), and withdrawals or partial surrenders.

Cash loan

All of the following life insurance provisions are considered exclusions, EXCEPT: The cash loan provision is a policy loan provision, not an exclusion.

Changes to the policy can only be implemented by an executive officer of the insurer.

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

Status clause and results clause

What are the two types of war/military service exclusions? The two kinds of war/military service exclusions are: status clause and results clause.

Return all premiums TO the beneficiary

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. and NOT plus interest to the beneficiary.

The death benefit is paid.

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.

To exclude losses if the insured dies as a result of a hazardous occupation or hobby

What is the purpose of the hazardous occupation clause? Under the hazardous occupation clause, if the insured dies as a result of a hazardous occupation or hobby, the insurer will not pay the claim.

Pay the death benefit

What will the insurance company do if an insured commits suicide after the suicide clause expires? The insurance company will pay the death benefit if the insured commits suicide after the suicide clause lapses.

Modifications

Which of the following is a provision that requires any change to a life insurance policy be made by an executive officer of the insurer, and attached to the policy? 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.

Insured commits suicide during the suicide clause period

Which of the following is a situation where the insurance company refunds premiums paid? If an insured commits suicide during the suicide clause period, the insurer will refund the premiums to the beneficiary. The insurer is not required to pay the policy's cash value (premiums plus interest) to the beneficiary.