What will the insurer do if an insured commits suicide six months after the policy is issued according to the suicide clause?

The correct approach regarding the suicide clause in life insurance policies involves understanding how such clauses typically work. When an insured commits suicide within a stipulated period (commonly two years from the policy's issuance), the insurance company is generally not liable to pay the death benefit. However, it is important to note that many insurance policies stipulate that if suicide occurs after this period, the death benefit may be paid out.

In the scenario described, since the suicide occurred six months after the policy was issued, the insurer would typically invoke the suicide clause, which often denies the death benefit during the first two years of coverage. Instead, the insurer would usually refund all premiums paid up to that point to the beneficiary or the estate of the insured as compensation.

Therefore, the choice stating that the insurer will refund all premiums paid aligns correctly with the conditions set forth by the insuring contract regarding the suicide clause. This clause is designed to prevent potential abuse of the policy while promoting responsible use of life insurance.