Suicide Clause

Suicide Clause Suicide clause is a standard clause in life insurance policies that limits payments made to survivors of a policyholder who dies by suicide within a certain period after purchasing the policy. If the policyholder dies by suicide within the first two years of the policy, then the insurance will not give beneficiaries the death benefit. If the death occurs after the two-year period, beneficiaries receive the death benefit. The suicide clause is separate and distinct from the "contestability period" which allows your provider to review your application for intentional errors after a death claim. The contestability period only lasts for two years. Many life insurance policies contain a suicide clause or provision. Companies will typically not pay a death benefit if the policyholder commits suicide within the first one to two years that the policy is in force. Changing a policy can restart the suicide exclusion period. Insurance companies may request additional documentation if they suspect suicide as the cause of death. If the life assured commits suicide within within the suicide clause period or date of revival if revived, whether sane or insane at that time, the policy would be void, and no claim will be payable.” The purpose of the suicide clause is to prevent moral hazard, someone who may be a suicide risk from taking out a hefty life insurance policy for the purpose of a desired beneficiary receiving a lavish payout. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful