This is absolutely false and a complete lie started to make us look retarded. After 2 years life insurance pays out regardless of cause of death, including suicide. In the first 2 years there are several restrictions (suicide is one). The first two years is the "contestability window", so if you die under suspicious circumstances or they find out you had a health issue you didn't disclose, then your policy can be contested and potentially not payout. The things they contest are generally lies on the application such as telling them you are healthy when you just had a heart attack last week. If they find out about the lie >2 years later, it would likely go to court and who knows what would happen. Your beneficiaries would likely just need to pay the difference in premiums would be my guess, but I am not a lawyer. Lying on an official document is generally a bad idea. Source: I have a license to sell insurance.