Suicide Clause Exclusion

By | June 9, 2013
Life insurance have suicide clause to protect the insurer and other policy holders from a person who intentionally takes policy and commits suicide immediately after issuance of policy.

Usually the suicide clause would be in force for one or two years from the date of inception as stated in the policy document. If a person commits suicide within this period, the insurer will not pay the death claim and premium paid thus far may be returned.

If suicide is committed  after the said period, the insurer has to pay the sum assured to the nominee or dependents of the life insured. Thus interest of the policy holder is also protected  The logic behind is, suicide is an emotional decision and cannot be planned well before to get the claim.

Say,  term of policy is 20 years and the policy holder failed to pay the premium after 9th year which turns the policy to lapsed state. After knowing the importance of the policy, the holder renews the policy by paying required premium and fee, then also suicide clause come in to effect for the said one or two years.

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