A life insurance policy excludes death resulting from the insured committing a felony. If the insured dies during a burglary, the insurer will most likely:

Why A is correct

Life insurance policies commonly exclude deaths caused by the insured's participation in illegal activity, such as committing a felony. If the insured dies while committing a burglary or other felony, the death falls within the exclusion and the insurer may deny the claim. The exclusion reflects public policy that prevents an insured from profiting from criminal conduct, and the risk is uninsurable. An insurer may return the premiums paid as a matter of goodwill, but it is not obligated to pay the face amount.

Why the other options are wrong

• B) An accidental death during a felony is still excluded; the illegal activity exclusion applies regardless of whether the death was accidental. The exclusion does not distinguish between accidental and intentional deaths; the illegal act is the trigger.
• C) Accidental death benefits require death by accident within the coverage terms, and a death during a felony falls within the illegal activity exclusion, so double indemnity would not apply.
• D) Insurers are not penalized for honoring a valid exclusion; no interest is paid on a claim the policy excludes. Honoring a valid exclusion is lawful, and no penalty interest attaches to a correctly denied claim.

Memory hook

Felony in progress, coverage expires: the illegal activity exclusion ends the claim.