suicide clause

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Suicide clause is a standard clause in life insurance policies that limits payments made to survivors of a policyholder who dies by suicide within a certain period after purchasing the policy. Insurance companies typically don’t pay a death benefit if the covered person dies by suicide within the first two years of coverage - commonly known as the exclusion period. When the exclusion period ends, the policy's beneficiaries can receive a death benefit if the covered person dies by suicide. 

In most states, the exclusion period is two years but in states such as Colorado, Missouri and North Dakota, the exclusion period is shorter and the beneficiaries can claim death benefits after the policy has been in force for a year. 

[Last updated in August of 2021 by the Wex Definitions Team]