United States
Hong KongLife policy exclusions: war, aviation and dangerous occupation
Three, and only three, are listed: war, aviation and dangerous occupation. All are usually handled by exclusion or by an extra premium rather than a refusal to insure. The list being this short is itself the exam point, because life insurance excludes far less than health insurance does.
Pearson gives this heading three sub-items and nothing else. That brevity is worth noticing before you start memorizing, because it tells you the answer to a whole family of questions: if a stem asks whether a life policy excludes something, the default answer is no.
The three
| Exclusion | What it removes | The alternative to excluding |
|---|---|---|
| War or military service | Death in war, or while in military service | A war clause limited to a period, or a rated premium |
| Aviation | Death while flying other than as a fare-paying passenger | An aviation exclusion rider, or a rated premium |
| Dangerous occupation | Death arising from named hazardous work | A rating rather than an exclusion in most cases |
The right column is the part candidates skip. An insurer facing an unusual risk has three moves: decline, exclude, or charge more. It usually charges more, because a declined applicant buys nothing and an excluded risk still leaves the insurer with a policy on the books.
Status and results
War clauses come in two shapes and the distinction is examinable.
- A status clause excludes death while the insured holds a certain status, such as being in military service, whatever the cause of death. Die in a car accident while serving and the exclusion applies.
- A results clause excludes only death resulting from war or an act of war. Die in a car accident while serving and the policy pays.
Status is broader and worse for the insured. Results is narrower and better. If a stem gives you a death that is unrelated to combat but happens during service, it is testing exactly which clause is in the contract.
The aviation exclusion, and how narrow it is
Commercial air travel as a fare-paying passenger is not excluded by anything. It has not been an unusual risk for decades. What an aviation exclusion targets is private piloting, student flying, military aviation and similar, and even there the market's usual answer is a rating rather than an exclusion.
The outline files suicide under provisions rather than exclusions, and rightly so: the suicide clause is time-limited and refunds premiums, where an exclusion is permanent and pays nothing. Treating suicide as an exclusion is a category error the exam can build a question on.
A policy carries a war exclusion drafted as a results clause. The insured, serving overseas, dies of a heart attack in barracks. What is payable?
- Nothing, because the death occurred during military service
- The full death benefit, because the death did not result from war
- A refund of premiums paid
- The cash value only
Why the health side has a longer list
Section VI, the accident and health provisions, carries exclusions and limitations, preexisting conditions, illegal occupation and change of occupation as separate items. Health insurance excludes more because it pays repeatedly on events that are partly within the insured's control, while a life policy pays once on an event that is not.
Holding that contrast in mind stops you importing health exclusions into a life question, which is the commonest way this small heading generates a wrong answer.
The opinion, and the concession
Five minutes, and then stop. This heading is worth about one question and the entire content is three words plus the status and results distinction. Candidates who feel uneasy about it are usually uneasy because they expect a longer list, and the correct response to that unease is to trust the outline. Pearson wrote three.
The concession: whether any given carrier excludes or rates a particular hazardous occupation is an underwriting decision and varies. The Texas Insurance Code lists prohibited provisions for life policies at TIC 1101.054 and the outline points there, but we do not hold the Administrative Code rules that sit alongside it, so this page describes the exclusion types rather than the limits Texas places on them.
Common questions
What exclusions does the content outline list for life policies?
Three: war, aviation and dangerous occupation. That is the whole heading, and its brevity is informative. Life insurance excludes far less than accident and health insurance, which has separate outline items for exclusions and limitations, preexisting conditions and change of occupation.
What is the difference between a status and a results war clause?
A status clause excludes any death occurring while the insured holds a stated status such as military service, whatever the cause. A results clause excludes only death that results from war or an act of war. Status is broader and worse for the insured.
Is commercial air travel excluded?
No. Travel as a fare-paying passenger on a scheduled flight is not an unusual risk and is not excluded. An aviation exclusion is aimed at private piloting, student flying and similar activity, and even those are often handled with an extra premium rather than an exclusion.
Is suicide a life policy exclusion?
Not in the outline's sense. Suicide is listed under provisions, because the suicide clause is limited in time and returns the premiums paid rather than denying everything. An exclusion is permanent and pays nothing, so treating the two as the same thing is a testable error.