Texas Life Agent Practice Exam

What typically occurs when a policy includes a suicide clause for a specified period?

1. Suicide is covered immediately

2. Suicide is covered only after the period expires

3. All deaths from suicide result in policy termination

4. Suicide is excluded entirely

The correct answer is: Suicide is covered only after the period expires

When a life insurance policy includes a suicide clause for a specified period, it means that the insurer will not pay out the death benefit if the insured dies by suicide within the defined period, which is typically the first two years of the policy. If the insured commits suicide during this time, the benefit is not payable, but the coverage will remain in effect after the period expires. This clause is designed to prevent insurers from being taken advantage of by individuals who may take out a policy with the intent of committing suicide shortly thereafter. Once the specified period has elapsed, suicide would then be covered under the terms of the policy, allowing for the payout of the death benefit to beneficiaries in the event of suicide.