The suicide clause is a provision found in virtually all life insurance policies that limits or excludes the death benefit if the insured dies by suicide within a specified period after the policy is issued — typically two years. If the insured dies by suicide during this exclusion period, the carrier will typically not pay the full death benefit. Instead, beneficiaries usually receive a refund of premiums paid. After the exclusion period expires, death by suicide is covered like any other cause of death, and the full benefit is paid to beneficiaries.
The suicide clause exists to prevent individuals from purchasing life insurance with the intent of taking their own life to provide a financial benefit to their families. By imposing a two-year waiting period, carriers create a deterrent while still providing coverage for the vast majority of policyholders who have no such intent. This provision balances the carrier's need to manage risk with the recognition that mental health conditions are common and should not permanently exclude individuals from coverage.
It is important to understand how the suicide clause interacts with other policy provisions. The two-year suicide exclusion period runs concurrently with the contestability period but serves a different purpose. The contestability period allows the carrier to investigate application accuracy, while the suicide clause specifically addresses one cause of death. If a policy is reinstated after a lapse, the suicide exclusion period typically restarts from the reinstatement date.
For individuals with a history of depression, anxiety, or other mental health conditions, the suicide clause does not prevent them from obtaining coverage. These individuals can and do qualify for life insurance, and after the two-year period, their coverage is fully comprehensive. The clause is a standard provision that applies to all policyholders, not a targeted exclusion for those with mental health histories.