Final answer:
An exclusion in a life insurance policy outlines the specific risks not covered by the policy. These exclusions help both the insurer manage risks and the insured understand policy limitations. Option a is the answer.
Step-by-step explanation:
The answer to the student's question regarding a life insurance policy is an exclusion. A(n) exclusion contained in a life insurance policy states that the policy will NOT cover certain risks. This means that the insurance contract specifically lists conditions or circumstances under which the insurance company will not extend coverage or benefits to the policyholder.
For instance, a common exclusion would be not paying out for deaths caused by participating in high-risk activities such as skydiving. Understanding exclusions is critical to recognizing the limits of one's insurance policy and avoiding the moral hazard of assuming protection against all types of losses.