What might happen if an insured individual commits suicide during the contestability period?

When an insured individual commits suicide during the contestability period of a life insurance policy, the insurer has the right to deny the claim based on the specific terms outlined in the policy. The contestability period typically lasts for two years from the policy's effective date, during which the insurer can investigate and contest claims based on misrepresentations or non-disclosure of material information during the application process.

In the context of suicide, most life insurance policies contain a specific exclusion that allows the insurer to deny payment if the insured takes their own life within this contestable period. This condition is meant to protect insurance companies from potential fraudulent claims submitted shortly after the issuance of a policy, where an individual may purposely take their life to provide a benefit to beneficiaries.

While it is true that the claim may be investigated further, which is common for all claims, especially during the contestability period, the key factor here is the policy's denial of claims for suicide during this timeframe, making it the correct answer. Understanding these nuances is essential for anyone studying life insurance policies and the implications of the contestability period.