Life & Health Insurance Exam (National Portion)Policy Provisions, Options, and RidersMedium
A life insurance policy states that if the insured commits suicide within two years of the policy's issue date, the insurer will only return the premiums paid, without interest. This is an example of which policy provision?
- AReinstatement Provision
- BGrace Period
- CIncontestability Clause
- DSuicide Clause
Show answer & explanationAnswer & explanation
Correct answer: D. Suicide Clause
The Suicide Clause in a life insurance policy typically states that if the insured commits suicide within a specific period (usually two years) from the policy's issue date, the insurer's liability is limited to a return of the premiums paid, without the death benefit.
Why the other options are wrong
- A. Reinstatement allows a lapsed policy to be restored under certain conditions.
- B. A Grace Period allows extra time to pay premiums before policy lapse.
- C. The Incontestability Clause relates to misstatements on the application, not suicide.
Suicide Clause
A life insurance policy provision that limits the insurer's liability to a return of premiums if the insured commits suicide within a specified period (typically two years) from policy issuance.
- Usually a 2-year exclusion period
- Return of premiums, not death benefit
- After period, full death benefit is paid for suicide
Memory trick: SUICIDE INCONTESTABLE GRACE