What is the intent of the suicide clause?

• A. To discourage individuals from purchasing an insurance policy while contemplating suicide.
• B. To guarantee payment of the death benefit after suicide.
• C. To speed up claims processing.
• D. To waive the suicide exclusion after a specified period.

Answer: (A)

The suicide clause is about protecting the insurer from a moral hazard: it aims to deter someone from buying life insurance with the plan to commit suicide soon after. If death occurs by suicide within the specified period (often two years), the death benefit isn’t paid and premiums are typically refunded. After that period, the policy generally pays like any other death claim. So the option that says it discourages individuals from purchasing a policy while contemplating suicide best captures the intent. The other statements don’t describe the purpose of this clause.