When can an insurance company use suicide as a defense against paying a death claim?

The correct answer is based on the common provision found in life insurance policies known as the suicide clause. Insurance companies typically include a suicide clause that states they will not pay out death benefits if the insured commits suicide within a certain period, often two years from the policy's effective date. This clause is included to prevent potential abuse of the insurance system, where someone might purchase a life insurance policy with the intention of committing suicide shortly thereafter to provide financial benefits to their beneficiaries.

If the suicide occurs after this specified period, the insurance company generally cannot deny the claim on these grounds, and the death benefit would be payable to the beneficiaries. The time frame is intended to provide a degree of stability to the insurance risk and also recognizes that many individuals who might commit suicide may be suffering from mental health issues which can change over time.

Other options may not properly address the circumstances under which a valid claim can be successfully contested based on suicide.