Question

1-4

1. in order to prevent an insured from purchasing a life insurance policy and soon thereafter committing suicide to provide for beneficiaries, a policys typical suicide clause generally pays out for a suicide death only after:

a. 1 year
b. 2 years
c. 3 years
d. 5 years

1. what is the term for a statement that, if it had been disclosed, would have caused an insurer not to issue a policy?

a. important
b. relevant
c. material
d. pertinent

Explanation:

1. For life insurance suicide clauses, the standard waiting period to prevent adverse selection (purchasing policy to commit suicide for beneficiaries) is 2 years.
2. In insurance terminology, a statement that would lead an insurer to reject a policy if disclosed is defined as a material statement.

Answer:

1. b. 2 years
2. c. material