Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A life insurance policyholder dies by suicide 14 months after the policy was issued. Under the standard suicide clause, the insurer will most likely:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The standard suicide clause provides that if the insured dies by suicide within two years of issue, the insurer pays only a return of premiums paid, rather than the full death benefit. After two years, suicide is covered like any other cause of death. The purpose is to prevent someone from buying a policy intending to immediately collect on self-inflicted death.
Why the other options are wrong
- B) Suicide within the two-year window limits the benefit to a return of premiums; it is not fully covered during that period.
- C) The cash value is not 'paid in lieu'; the contract remedy is a refund of premiums paid.
- D) The insurer does not deny with nothing; it returns the premiums — a limited but real payment.
Memory hook
Suicide clause = a two-year cooling-off on self-inflicted claims: premiums back, not the full check. After two years, it pays like any death.