How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

When an insured commits suicide within the contestable period of a life insurance policy, the claim is typically denied under the suicide clause of the policy. This clause is specifically included to protect insurance companies from the risk of adverse selection, in which individuals purchase life insurance with the intent to benefit financially from their own death. During the contestable period, which usually lasts for the first two years of the policy, insurers have the right to investigate the circumstances surrounding the death of the insured. If it is determined that the death was indeed a result of suicide, the insurance company is within its rights to deny the claim based on this clause, as the policy usually stipulates that coverage for suicide is excluded for a defined period following the contract's initiation. Consequently, claims related to suicide during this time frame do not result in benefits paid out to beneficiaries.