The suicide clause, in life insurance contracts, is a provision designed to reduce adverse selection.

Name: The suicide clause, in life insurance contracts, is a provision designed to reduce adverse selection.
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The suicide clause prevents individuals from purchasing life insurance with the intent of committing suicide shortly after, thus reducing the risk of adverse selection by ensuring that the insurer is not disproportionately covering high-risk individuals.

The Suicide Clause, in Life Insurance Contracts, Is a Provision