Which of the following is generally a common exclusion in life insurance policies?

Claims related to fraud or terrorism are typically a common exclusion in life insurance policies. Insurers often exclude coverage for deaths resulting from acts of fraud because allowing such claims would encourage dishonest behavior. Insurance is designed to mitigate risk, and covering fraudulent acts would undermine the integrity of the insurance system.

Similarly, terrorism is also commonly excluded due to the unpredictable and catastrophic nature of such incidents, which can lead to massive claims that could threaten the insurer's financial stability. By excluding these types of claims, insurance companies protect themselves from underwriting highly volatile risks that could otherwise destabilize their operations.

This exclusion supports the principle of risk pooling that is fundamental to insurance, whereby premiums from a large number of policyholders are used to pay for the claims of a few. Excluding high-risk scenarios like fraud and terrorism helps insurers maintain sustainable practices and keep premiums at manageable levels for consumers.

In contrast, death from natural causes is typically covered by life insurance policies, and while injuries sustained from sports may have some exclusions, it is less common to see a blanket exclusion for all sporting activities unless specifically noted in the policy. Accidents while driving may also be covered, depending on the circumstances, so these options do not represent common exclusions in the way that fraud or terrorism does.