New York Insurance Exam Practice Question
What is the purpose of a policy's suicide clause?
Correct Answer: B
Rationale: A policy's suicide clause is designed to limit coverage for suicide within a specified period, typically the first two years of the policy. This is intended to prevent individuals from purchasing life insurance with the intention of committing suicide shortly thereafter, ensuring the policy serves its intended purpose of providing financial protection.
Option A is incorrect; while premiums may be influenced by various factors, the suicide clause does not exist to increase them. Option C misrepresents the clause's intent; it does not waive the death benefit entirely but restricts it under certain circumstances. Option D is also wrong, as the clause does not cancel the policy but rather sets conditions for the payout related to suicide.
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