What does the refund of premiums in a suicide clause indicate?

The refund of premiums in a suicide clause indicates that the insurer limits its liability to only returning the premiums paid by the policyholder. This provision typically applies if the insured dies by suicide within a specified period after the policy has been issued, usually the first two years. Instead of providing the full death benefit, which would not be applicable in this situation, the insurer simply refunds the total amount of premiums paid. This clause is designed to discourage individuals from purchasing life insurance with the intent of committing suicide shortly thereafter to benefit their beneficiaries financially.

The other options do not accurately reflect the terms of most suicide clauses in insurance policies. Full policy value return, receiving no benefits at all, or only half of the premiums back do not align with how the suicide clause is structured in standard life insurance agreements.