Maryland Life and Health Insurance License Practice Exam

A life insurance policy usually contains a provision that limits coverage in all of the following situations EXCEPT:

1. Suicide

2. Acts of war

3. Felony conviction

4. Accidental death

The correct answer is: Accidental death

In a life insurance policy, provisions that limit coverage are often included to account for specific high-risk scenarios. Suicide clauses, for instance, typically exclude coverage if the insured takes their own life within a certain period (usually the first two years of the policy). Acts of war can also be covered with restrictions, as engaging in war-related activities can significantly increase risk. Similarly, if the insured engages in illegal activities or is convicted of a felony, coverage may be limited or denied altogether. Accidental death, however, generally falls outside of these limiting provisions. Most life insurance policies cover accidental death without restriction, meaning that if the insured dies as a result of an accident, the beneficiaries will receive the death benefit as stipulated in the policy. Accidental deaths are typically seen as unforeseen events that do not warrant exclusions like those applied to suicide, war, or felonies. Thus, this aspect of coverage provides reassurance to policyholders and their beneficiaries about the financial support provided in the event of unexpected circumstances.