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Insurance · Policy Provisions and Riders

What is the 'suicide clause' in life insurance?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

A provision that if the insured dies by suicide within a specified period (typically 1-2 years), the insurer refunds premiums paid but does not pay the death benefit

  1. A A clause preventing all coverage
  2. B Has no effect on the policy
  3. C A provision that if the insured dies by suicide within a specified period (typically 1-2 years), the insurer refunds premiums paid but does not pay the death benefit
  4. D Pays double benefit for suicide

Why this is the answer

The suicide clause limits the insurer's liability for suicide deaths during an initial exclusion period (typically 1 or 2 years from policy issue date). If suicide occurs during this period, the insurer returns the premiums paid (sometimes with interest) but does not pay the death benefit. After the exclusion period, suicide is treated as any other cause of death and the full benefit is paid. The provision exists because the insurer cannot reasonably price for the risk of someone purchasing insurance with the intention of suicide; the exclusion period removes this incentive. The clause is required in many state contracts and is a standard part of life insurance policies. The two-year period is more common in larger policies.
Source: NAIC Model Outline, Suicide Clause

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About this topic: Policy Provisions and Riders

Policy provisions and riders cover the standard clauses — incontestability, grace period, reinstatement, misstatement of age, nonforfeiture options, settlement options — and the common riders such as waiver of premium and accidental death. This is one of 17 Life Insurance questions on policy provisions and riders, each with a full explanation on a single study page.

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