Suicide Clause
A provision in most life insurance policies that states that if the insured dies by suicide within a certain period after the policy is issued (typically two years), the insurer will only return the premiums paid, not the full death benefit.
Detailed Explanation
This clause aims to discourage individuals from obtaining life insurance with the intention of committing suicide shortly thereafter.
Practical Example
John purchased a life insurance policy. Unfortunately, he died by suicide within the first year. Due to the suicide clause in his policy, his beneficiaries received only the amount of premiums that had been paid.
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