What feature of a life insurance policy indicates risks that will not be covered?

What feature of a life insurance policy indicates risks that will not be covered?

• A. Conditional clause
• B. Exclusion
• C. Beneficiary designation
• D. Incontestability clause

Answer: (B)

The feature of a life insurance policy that indicates risks that will not be covered is the exclusion. Exclusions are specific provisions included in the policy that outline certain circumstances or situations that the insurer will not cover. For instance, common exclusions in life insurance policies may include deaths resulting from suicide within a specified period after the policy is issued or deaths resulting from hazardous activities like skydiving. By clearly stating these exclusions, the policy defines the limits of coverage and helps both the insured and the insurer understand the scope of the policy. In contrast, a conditional clause refers to specific conditions under which certain benefits may be paid, rather than outlining risks that are excluded. A beneficiary designation involves naming the individuals who will receive the insurance benefits upon the insured's death but does not indicate coverage risks. The incontestability clause protects the policyholder after a specified period, preventing the insurer from disputing the validity of the contract based on misrepresentation or other issues, rather than specifying deductibles or risks excluded from coverage.

The feature of a life insurance policy that indicates risks that will not be covered is the exclusion. Exclusions are specific provisions included in the policy that outline certain circumstances or situations that the insurer will not cover. For instance, common exclusions in life insurance policies may include deaths resulting from suicide within a specified period after the policy is issued or deaths resulting from hazardous activities like skydiving. By clearly stating these exclusions, the policy defines the limits of coverage and helps both the insured and the insurer understand the scope of the policy.

In contrast, a conditional clause refers to specific conditions under which certain benefits may be paid, rather than outlining risks that are excluded. A beneficiary designation involves naming the individuals who will receive the insurance benefits upon the insured's death but does not indicate coverage risks. The incontestability clause protects the policyholder after a specified period, preventing the insurer from disputing the validity of the contract based on misrepresentation or other issues, rather than specifying deductibles or risks excluded from coverage.