Insurance Products & Coverage Types Flashcards

Which type of life insurance policy builds cash value AND provides a fixed death benefit for the insured's entire lifetime?

Answer: Whole life

Whole life insurance provides permanent coverage with a guaranteed death benefit and accumulates cash value over time.

A homeowner's policy written on an 'open peril' (all-risk) basis covers losses from:

Answer: All causes of loss except those explicitly excluded

Open peril (all-risk) policies cover any cause of loss not specifically excluded, giving broader protection than named-peril forms.

Under a Business Owners Policy (BOP), which coverage is typically EXCLUDED that must be purchased separately?

Answer: Commercial auto liability

A BOP bundles property and general liability but does NOT include commercial auto; vehicles require a separate commercial auto policy.

The 'incontestability clause' in a life insurance policy generally prevents the insurer from voiding the policy after:

Answer: 2 years

After two years, insurers cannot contest the validity of most life policies based on misrepresentation, except for fraud.

Which liability coverage pays for bodily injury or property damage that occurred during the policy period, regardless of when the claim is filed?

Answer: Occurrence policy

Occurrence policies trigger on when the injury or damage happened, not when the claim is submitted.

Medical Payments coverage on a homeowner's policy differs from liability coverage because it pays:

Answer: Regardless of fault for guests injured on the premises

Medical Payments (Coverage F) is a no-fault coverage paying guest medical bills without requiring proof of the insured's negligence.

An umbrella liability policy is designed primarily to:

Answer: Provide excess limits above underlying policies and fill certain coverage gaps

Umbrella policies sit above underlying coverage limits and often extend to some exposures not covered by the underlying policies.