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 serves to limit coverage for death by 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 intent to commit suicide shortly thereafter, which would be a misuse of the policy.
Option A is incorrect as the clause does not deny all claims; it specifically addresses claims related to suicide. Option C is misleading; while premiums may vary based on risk factors, the clause itself does not directly increase premiums. Option D is also wrong, as the clause does not waive the death benefit entirely, but rather restricts it under certain conditions.
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