What happens if an insured commits suicide within the defined period in a suicide clause?

When an insured commits suicide within the defined period of a suicide clause, the standard provision in life insurance policies generally stipulates that only the premiums paid are refunded. This provision aims to prevent individuals from using life insurance as a means to provide financial benefit upon their death in the case of suicide during the early period of coverage, which commonly spans the first two years of the policy.

The rationale behind this clause is to prevent abuse of the insurance system, where someone may secure a policy with the intent to commit suicide shortly thereafter. By limiting the benefit to the return of premiums, the insurance company mitigates financial risk while also promoting responsible use of the policy.

Thus, option B correctly captures the essence of the suicide clause's terms, ensuring that the insurer is not liable for the full death benefit if the insured takes their own life within the specified time frame. This arrangement balances the needs of the policyholder with the financial interests of the insurance company.