Tennessee Life Producer Practice Exam

Which of the following is an exclusion commonly found in life insurance?

1. Suicide within the first two years

2. Death resulting from natural causes

3. Accidents occurring while driving

4. Illness diagnosed after policy issue

The correct answer is: Suicide within the first two years

Suicide within the first two years is a common exclusion found in life insurance policies. This exclusion is designed to prevent potential abuse of the insurance system, where individuals might consider taking their own life to benefit their beneficiaries financially shortly after obtaining a policy. The standard provision, often referred to as the suicide clause, states that if a policyholder commits suicide within this period, the insurer is only obligated to return the premiums paid, rather than paying the death benefit. This is a typical protective measure that insurers implement to mitigate risk and ensure the integrity of the life insurance market. The other options do not typically represent exclusions in life insurance policies. Death resulting from natural causes and accidents occurring while driving are generally covered events, as life insurance is meant to provide financial support for beneficiaries regardless of the cause of death, as long as it does not fall under any specific exclusions. Illness diagnosed after policy issue usually refers to a situation where a pre-existing condition cannot be claimed if it leads to death, but this is distinct from immediate exclusions like suicide during the early policy term.