Washington Life Producer Practice Exam

Which situation does NOT restrict life insurance coverage upon the death of the insured?

1. War-related incidents

2. Suicide within a grace period

3. Fare-paying passenger

4. Conviction of a felony

The correct answer is: Fare-paying passenger

Life insurance policies are designed to provide coverage under a variety of circumstances, but certain situations can lead to exclusions or restrictions. In the context of the question, the situation where restrictions do not apply is when the insured is a fare-paying passenger. When an individual is a fare-paying passenger on a common carrier, such as a bus, train, or airplane, they are typically covered under standard life insurance policies. Insurance companies recognize the nature and regulation surrounding commercial transportation, which tends to be safer due to stringent safety standards. Therefore, being a fare-paying passenger does not constitute a situation that would trigger an exclusion or restriction on life insurance coverage. In contrast, war-related incidents can lead to exclusions since many policies restrict coverage if the insured dies while involved in active warfare. Similarly, suicide within a grace period may also restrict coverage as most life insurance policies have specific clauses regarding suicides, often excluding coverage for a designated period following policy initiation. Lastly, a conviction of a felony might lead to restrictions or exclusions, particularly if the circumstances surrounding the felony are deemed risky or dangerous, resulting in increased risk for the insurer. Thus, being a fare-paying passenger stands out as the situation where life insurance coverage remains intact, demonstrating that it does not present the same