Glossary
Suicide clause, defined
A provision in most policies that limits the payout if the insured takes their own life within a set time after the policy is issued, usually one or two years. Within that window the insurer refunds the premiums paid rather than paying the face amount; after it, the death is covered like any other.
In practice
The window exists to stop someone buying coverage with that intent, and it is separate from the incontestability window although the two are often the same length. The exact period varies by state and carrier and appears in the policy wording, not the application. Reinstating a lapsed policy or replacing it with a new one restarts the clock, which is a reason to keep an existing policy in force during any replacement. Group life through an employer often has no such provision or a shorter one. Beneficiaries dealing with such a claim should expect the insurer to request the death certificate and possibly a police report before deciding.
A worked example
Suppose a policy with a $300,000 face amount and a two-year exclusion is issued in January. Suppose the insured dies by suicide the following October; the insurer returns the premiums paid, say $1,400, to the beneficiary. Had the death occurred three years after issue, the full $300,000 would be payable. Hypothetical figures.
Applies to: Life InsuranceTerm Life Insurance