What occurs if suicide happens within the suicide clause period?

When a suicide occurs within the suicide clause period of a life insurance policy, the insurance company typically refunds only the premiums paid by the insured. This clause is designed to protect insurers from individuals who may take out a policy with the intention of committing suicide shortly thereafter, thus attempting to secure a payout for beneficiaries.

The rationale behind this is that most life insurance policies have a specific period, usually two years, during which the suicide clause is in effect. If the insured dies by suicide within this timeframe, the policy does not pay out the full benefits to the beneficiaries. Instead, the insurer limits their liability to simply refunding the premiums that were paid into the policy, as a safeguard against abuse of the insurance system.

In this context, if more than the premium was paid or any other benefits would be directly claimed by the beneficiaries, those would be denied. Therefore, only the accumulated premiums, without any additional payouts, are refunded to the beneficiaries if the insured commits suicide within the stipulated clause period.