Legal Definitions - first policy year

Definition: The first year of a life-insurance policy that is automatically renewed annually. During this year, the insurer cannot use the policy's suicide exclusion as a defense to refuse payment if the insured commits suicide. However, after the first policy year, the insurer can use the suicide exclusion as a defense to payment if the insured commits suicide.

Example: John purchased a life insurance policy that automatically renews every year. If John commits suicide during the first policy year, the insurer cannot use the suicide exclusion as a defense to refuse payment. However, if John commits suicide after the first policy year, the insurer can use the suicide exclusion as a defense to refuse payment.

Explanation: The example illustrates that during the first policy year, the insurer cannot use the suicide exclusion as a defense to refuse payment if the insured commits suicide. This is because of the statutory phrase that prohibits the insurer from doing so. However, after the first policy year, the insurer can use the suicide exclusion as a defense to refuse payment if the insured commits suicide.