Tennessee Insurance Practice Exam

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If a pilot declines an additional premium modification for life insurance, what will likely happen?

  1. The insurer will deny coverage

  2. The insurer will issue the coverage with an Aviation Exclusion

  3. The insurer will issue the coverage without adjustments

  4. The insurer will negotiate the premium

The correct answer is: The insurer will issue the coverage with an Aviation Exclusion

When a pilot declines an additional premium modification for life insurance, it typically leads to the inclusion of an Aviation Exclusion. This is because flying is considered a high-risk activity by insurers. If a pilot does not agree to pay the additional premium that would cover the increased risk associated with flying, the insurer protects itself by excluding the risks tied directly to aviation from the policy. Therefore, in the event of a claim resulting from an aviation accident, the insurer would not cover it, since the risk has been explicitly excluded from the policy terms. This approach allows the insurer to offer a policy while mitigating their exposure to high-risk situations that they would otherwise have to cover if the pilot had accepted the modification.

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