Does Life Insurance Cover Suicide?
If you are suicidal, call the National Suicide Prevention Lifeline at 1-800-273-8255 for help and support from a certified counselor. Call 911 if you or a loved one is in urgent danger.
In the United States, more than 5.4 million people are survivors of suicide loss. Losing a loved one in this manner can be sad and perplexing. You must not only grieve, but also cope with the practical and financial aspects of death, such as replacing your loved one's lost income and preparing and paying for a funeral or memorial ceremony. Faced with a refused life insurance claim, these already onerous duties may appear unattainable.
Here's what you need to know about life insurance if someone dies by suicide.
Does Life Insurance Pay After a Suicide Death?
The payment of a death benefit following a suicide usually relies on when the death occurs. It's critical to understand that if a policy is obtained within two years of a suicide, the death benefit may be forfeited.
The length of the policy's incontestability period and the existence of a suicide provision determine whether a claim is paid out in these instances.
The Incontestability Clause
The two-year mark is significant since it often denotes the conclusion of the policy's contestable time. During this time, the life insurance company can deny a death benefit claim if the applicant made a major misrepresentation on the application or concealed information that would have influenced the insurance company's decision to issue the policy. For example, material misrepresentation could include lying about a diagnosed sickness.
However, when the period has expired, the insurance company can only challenge a claim if it is fraudulent. Assume you pay premiums on a policy without an incontestability clause for years; your spouse files a claim after your death, and the insurance company denies it because you misspelled something on the application. This provision is intended to prevent such an occurrence. After a certain length of time has passed, a claim becomes "incontestable."
A suicide provision or clause may be included in a life insurance policy in addition to this clause.
The Suicide Provision
Some policies stipulate that the death benefit will not be paid if the cause of death is suicide—typically during the first two years of the policy's issuance. However, such a condition could say that the premiums put into the policy must be repaid to the recipient.
Additional Clauses
Other clauses in life insurance contracts may exclude payouts for death as a result of:
- Aviation accidents
- Illegal activities
- Substance abuse
When a Suicide Death Benefit Claim Is Paid
An insurance policy is likely to honor a death benefit claim if the policy's suicide clause has expired (usually after two years) and the contestability period has ended (also typically after two years).
Even if a policy does not have an explicit suicide provision, it may opt to investigate a claim that it believes is doubtful during the contestability period. Though this may not result in a final denial of the claim, it may cause frustration and undue hardship by significantly delaying the payment of the death benefit.
When a Suicide Death Benefit Claim Is Denied
If the policy contains a suicide clause and a person dies as a result of suicide before the clause expires, it is exceedingly improbable that a claim will be recognized and the death benefit will be paid. This period is normally two years.
However, there is one essential caveat. If the life insurance policy lapses and is reactivated, the suicide clause and contestability period will most likely start over. Assume you lost your work and were unable to pay your insurance premium. As a result, your insurance policy is no longer valid. though you decided to (and the insurer allowed you to) restore the policy a year later, the contestability period and suicide clause would start over, even though you'd previously owned the insurance for years.
However, even if an insurance policy does not include a suicide provision, a claim may be denied within the contestability period. This may happen if the insurer's inquiry uncovered proof that the person lied on their application or died as a result of unlawful behavior or substance misuse.
The Bottom Line
Help is available if you have lost a loved one to suicide and are dealing with a life insurance policy claim. Alliance for Hope and Friends for Survival are two groups that provide survivors with support and services. Remember that taking care of yourself will eventually help you do the chores you need to complete at this time.
Inquire with your insurance agent about the specifics of your coverage if you're unsure under what circumstances it will pay out. If you are suicidal, call the National Suicide Prevention Lifeline at 1-800-273-8255 for help and support from a certified counselor. Call 911 if you or a loved one is in urgent danger.