State RegulationsNC specificDifficulty 2/5
An individual life policy issued in North Carolina limits suicide benefits for two years after issue. If the insured dies by suicide within that limitation window, what is the minimum the insurer must pay under G.S. 58-58-22(4)?
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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 North Carolina life policy may not limit suicide benefits for more than two years after issue, and during that window the insurer must at least return the premiums paid. The premiums-paid floor protects the beneficiary from total forfeiture without forcing the insurer to pay the full death benefit. Only after the window expires is the full benefit payable regardless of cause of death.
Why the other options are wrong
- A) The full benefit is not required during the limitation window; the statute sets a lower minimum during those two years.
- B) A refund tied to the policy's reserve value is not the North Carolina standard, which requires at least the premiums paid.
- D) The statute forbids outright forfeiture and sets a premiums-paid floor instead of voiding the policy.
Memory hook
Suicide in the window: premiums paid — not reserve, not zero.