Suicide Clause

Example

“When reviewing the life insurance policy, the agent explained that the suicide clause meant no benefits would be paid if death occurred by suicide within the first two years, but premiums paid would be returned to beneficiaries.”

Memory Tip

Remember 'TWO years to prove you're TRUE' - most suicide clauses last two years, after which the policy proves its commitment to pay regardless of cause of death.

Why It Matters

This clause protects insurance companies from adverse selection while still providing eventual coverage for suicide, recognizing that mental health crises often develop after policy purchase. Understanding this provision helps families know what to expect and ensures they maintain coverage through the initial period if needed.

Common Misconception

Many people believe suicide voids life insurance permanently, but most policies only exclude suicide during the initial period, usually two years. Others think the clause applies to accidental death from risky behavior, when it specifically applies only to intentional self-harm resulting in death.

In Practice

John purchases a $250,000 life insurance policy in January 2022, paying $200 monthly premiums. If he dies by suicide in March 2023 (14 months later), his beneficiaries would receive approximately $2,800 (premiums paid) rather than the $250,000 death benefit. However, if the death occurs in February 2024 (25 months after policy inception), his beneficiaries would receive the full $250,000 death benefit, as the suicide clause period has expired.

Etymology

The clause emerged in the mid-1800s as life insurers sought to prevent people from purchasing policies with the immediate intent of suicide, combining the legal term 'clause' with the specific exclusion for suicide deaths.

Common Misspellings

Related Terms

More in insurance

Other insurance terms you should know

See Also