Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insured with an in-force life policy takes up private airplane flying, and the insurer responds by adding an endorsement excluding coverage for aviation losses. What must the insurer do for the excluded coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
When an insurer excludes coverage for a newly assumed hazardous activity or occupation, the excluded coverage comes at no cost to the insured: the premium attributable to the excluded portion is refunded. The policy remains in force for all other covered causes of death. This rule prevents the insurer from continuing to charge for protection it no longer provides and is consistent with the treatment of hazardous avocations and occupations that are added to an existing policy by endorsement.
Why the other options are wrong
- A) The policy is not voided; only the excluded hazard is carved out by the endorsement, and the rest of the coverage stays in force.
- B) The insurer does not raise the face amount; the endorsement narrows coverage, so the premium adjustment runs in the other direction.
- D) A new medical exam is not required when an exclusion endorsement is added for a hazardous activity; only the premium for the excluded risk is refunded.
Memory hook
Excluded risk = returned premium. You cannot keep paying for coverage the insurer no longer gives.