Question 28

Special risk insurance pays benefits for death due to war or aviation.

This type of policy is specifically designed to cover high-risk scenarios, including deaths resulting from war and aviation-related incidents, which are often excluded from standard life insurance policies.

A) Ordinary whole life

Ordinary whole life insurance provides coverage for the insured's entire life and typically pays a death benefit regardless of the cause of death, unless specifically excluded. However, it generally does not cover deaths resulting from war or aviation unless those risks are explicitly included in the policy terms.

B) Limited pay life

Limited pay life insurance is similar to ordinary whole life but requires premiums to be paid for a limited period. Like ordinary whole life, it does not typically cover high-risk causes of death such as those resulting from war or aviation, making it an unsuitable choice for this scenario.

C) Special risk insurance

Special risk insurance is tailored for individuals engaged in high-risk activities or occupations, including those involved in aviation or military service. This policy explicitly covers deaths related to these risks, making it the most appropriate option in this context.

D) Variable life

Variable life insurance is a type of permanent life insurance that combines a death benefit with an investment component. While it provides coverage for a variety of causes of death, it usually does not include provisions for war or aviation-related deaths unless specifically stated, making it inadequate for this particular need.

Conclusion

Special risk insurance is the definitive correct answer as it is specifically designed to offer coverage for high-risk situations such as war and aviation, which are often excluded from standard policies. Other options do not adequately address the risks associated with these scenarios, thus failing to meet the requirements of the question.