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

An insurance company can invoke suicide as a defense against a death claim when death occurs within a specified period after policy issuance. This period, often referred to as the "suicide clause," usually spans the first two years of the policy. The purpose of this clause is to prevent individuals from taking out life insurance policies with the intention of committing suicide shortly thereafter to financially benefit their beneficiaries.

In the context of life insurance, if the insured dies by suicide during this designated period, the insurer typically will not have to pay the death benefit. Instead, they may refund the premiums paid to the beneficiary. This provision is important as it helps safeguard against moral hazard, ensuring that policies are not exploited.

The other choices pertain to different circumstances that do not directly relate to the specific issue of suicide exemptions in the context of a claim. The mental state of the insured, the contestable period regarding misstatements, and the nature of death being accidental do not establish a basis for denying a claim based on suicide. Thus, the answer highlights a significant limitation insurers place on liability to address specific risks associated with the timing of death in relation to the policy's initiation.