Life insurance policies providing coverage for suicide - Part 3
By admin on July 18th, 2010The suicide clause is designed to prevent people who are thinking about killing themselves obtaining life insurance in order to benefit the beneficiary. The clause states that if the insured commits suicide within a defined period of time, the policy will automatically be voided and the Insurance company will only have to refund all of the paid premiums. The amount of time varies, usually between 2 or 6 years.
Once the mandated period of time has elapsed, suicide is treated as any death that could occur (outside of an accident rider).
The suicide clause is part of what is called “Standard inclusions”
two other major ones are:
The incontestability clause, where for a certain period, the insurance company has the right to void a policy because they discover fraud, usually 2 years, after the 2 year period, the insurance company cannot void a policy for any reason other than failure to pay the premiums.
The Free look rule, where the insured has the right to look over the policy and still has one chance to return the policy and request a full refund, the time is usually 10 to 20 days after the executed policy is delivered to the policyholder
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