Massachusetts State Life Insurance Practice Exam

Which statement regarding blanket life insurance is true?

1. It provides coverage to individuals with specific names on a policy.

2. It covers individuals exposed to the same hazard without naming them in the policy.

3. It offers higher premiums than standard life insurance policies.

4. It is only available for employees of large corporations.

The correct answer is: It covers individuals exposed to the same hazard without naming them in the policy.

The statement about blanket life insurance that is accurate asserts that it covers individuals exposed to the same hazard without naming them in the policy. This type of insurance is designed to provide coverage to a group of individuals who share a common risk, typically in situations where it’s impractical to list every individual covered by the policy. For example, pilots of a certain airline or members of a sports team are a few instances where blanket life insurance would apply, as it ensures that all individuals within the defined group are protected against the same risks associated with their activities. The other choices do not accurately reflect the nature of blanket life insurance. Options that imply specific naming or designation of individuals do not align with the concept of blanket coverage, which is more generalized. Furthermore, blanket life insurance typically does not inherently come with higher premiums compared to standard policies; this depends on various factors including the risk involved. Lastly, blanket life insurance is not restricted only to employees of large corporations, as it can be available to any group sharing a common risk, not just corporate settings.