State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
When a life insurer adds an endorsement excluding coverage for a dangerous hobby such as auto racing, the endorsement:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
When an applicant participates in a hazardous avocation, such as auto racing, skydiving, or private flying, the insurer may issue the policy with an endorsement that excludes death caused by that activity. The endorsement removes coverage for the specific hazard rather than declining the applicant entirely. California law recognizes that when a policy is issued with an endorsement excluding a risk, a proportionate refund of premium attributable to that excluded coverage is generally provided, so the insured pays only for the protection actually delivered.
Why the other options are wrong
- A) An exclusion does not add coverage; it narrows the policy and may reduce the premium paid, not increase the death benefit.
- B) The exclusion is based on the insured's activity, not the insured's age, and applies immediately.
- C) There is no requirement that other life policies be cancelled because one policy carries an exclusion.
Memory hook
Endorsed-out hobby = no coverage, and a pro-rated premium refund.