Primerica Life Producer Practice Test

Which of the following statements about a suicide clause in a life insurance policy is true?

1. Suicide is covered at all times

2. Suicide is excluded for a specific period of years and covered thereafter

3. Suicide is only covered if the policy is active for ten years

4. Suicide claims require additional documentation

The correct answer is: Suicide is excluded for a specific period of years and covered thereafter

The statement that suicide is excluded for a specific period of years and covered thereafter is correct and reflects a common provision in life insurance policies known as the suicide clause. Typically, a life insurance policy will have a clause that states that if the insured commits suicide within a certain timeframe, often within the first two years of the policy, the insurer will not pay the death benefit. This initial exclusion period is intended to prevent individuals from purchasing life insurance with the intent of committing suicide shortly afterward. Once this period has elapsed, the policy generally will cover suicide just like any other cause of death, meaning beneficiaries will receive the death benefit. This provision aims to mitigate the risk of insurance fraud, as it discourages individuals from taking out a policy with the intention of benefiting financially through an intentional act of self-harm shortly after the policy is issued. Subsequent to the exclusion period, the insurance company will honor claims for suicide, thereby providing protection to the policyholder's beneficiaries as intended by the original purpose of the life insurance policy.