State RegulationsNC specificDifficulty 2/5
An insured in Durham dies by suicide less than two years after an individual life policy was issued, and the policy includes a suicide limitation covering that period. What is the minimum the insurer must pay under North Carolina law?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under G.S. 58-58-22(4), a life policy may limit benefits payable for suicide for no more than two years after issue, but during that window the insurer must pay at least an amount equal to the premiums paid. After the two-year period, suicide is treated like any other cause of death and the full benefit is payable.
Why the other options are wrong
- A) The policy is not void; the statute affirmatively requires a minimum payment equal to the premiums paid during the two-year window.
- B) A refund of the reserve value is not the North Carolina standard; the statute requires return of the premiums paid.
- D) The full death benefit is correct only after the two-year limitation period expires; within it, the insurer may limit payment to premiums paid.
Memory hook
NC suicide within two years: pay premiums back, not the reserve.