Virginia Life Insurance Laws and Rules Practice Exam

In Virginia, if a policyholder dies during the suicide clause period, the insurer typically pays nothing. The suicide clause is a provision in a life insurance policy that specifically addresses the situation where the insured commits suicide within a certain time frame, often two years from the date the policy went into effect. This clause is designed to prevent fraudulent claims and to ensure that the policy serves its intended purpose of providing financial protection to beneficiaries rather than acting as a financial tool for individuals contemplating suicide.

Once the suicide clause period has elapsed, the insurer would generally proceed with full benefits under the policy as long as all other conditions are met. However, within the designated suicide period, the insurance company has the right to deny the claim altogether, which reflects its reliance on calculated risk assessments when underwriting policies. This ensures that the life insurance system is not exploited by premeditated actions taken within the vulnerable time frame shortly after policy issuance.