If you’re experiencing suicidal thoughts, it’s essential to seek help. Please contact The Suicide Hotline Or Call 911.
Millions of individuals across the US carry some life insurance policy to provide their loved ones with financial support in the event of their death. While taking out a policy is a responsible step for someone who wants to ensure a family’s financial future, some considerations need to be taken into account when certain conditions apply.
For example, what if the insured deals with a mental health condition or owns a small business? What if, upon the insured’s death, the medical examiner and/or insurance company ruled that the death was self-inflicted? Does life insurance pay for suicidal death?
The answer is complicated, but this article will cover if and when life insurance policies cover suicide.
Does Life Insurance Pay for Suicidal Death?
In many cases, life insurance policies will cover suicide if the policy has remained active for at least two years (one year for some providers). If the person covered through the insurance policy dies by suicide before the minimum number of years has passed, complications may arise regarding life insurance payouts.
In a later section, this article will cover suicide coverage in greater depth and the restrictions that might be put in place when unique circumstances occur.
Before proceeding, let’s go over a couple of key terms regarding suicidal death coverage: suicide clause and contestability period.
What is a Suicide Clause?
An insurance policy’s suicide clause, also called a suicide provision or a suicide exclusion, is the formal title assigned to the period that starts when the policy is issued and ends two years later (usually). If the insured individual dies by suicide before the two-year activity period has passed, the insurance company won’t pay out the death benefit.
When the period outlined in the policy’s suicide clause passes, beneficiaries can collect the insured’s death benefit as long as no other exclusionary actions are discovered during the insurance company’s investigation.
Suppose the insured changes the policy they’ve taken out, like adding or removing optional clauses or changing its value. In that case, some insurance providers will reset the suicide clause. This means the insured has another two years to wait until the suicide clause passes.
What is a Contestability Period?
A contestability period is the first two years an individual pays into a life insurance policy. Still, the details related to this clause and its timeline aren’t entirely focused on suicidal death. During the policy’s contestability period, insurance companies can investigate the insured’s cause of death. The company is also entitled to examine and review the documents submitted when the policy was created. The company can deny payment if this investigation renders the death claim invalid.
If the insurance company has discovered a valid reason to deny paying out the insured’s death benefits, it doesn’t matter whether the insured died by suicide or other causes.
As with suicide clauses, the contestability period might reset if the insured changes the policy.
Once the two-year period has passed, insurance companies can use neither of the above-mentioned clauses to deny payment.
Regardless of how long a policy has been active when the insured individual dies, insurance companies are entitled to perform an essential investigation. Usually, this investigation involves verifying the cause of death by examining the insured’s death certificate.
In some cases, the insured’s cause of death may be listed as inconclusive, or a medical examiner may delay recording a cause of death until further testing is performed. In these situations, the insurance company can typically request supplementary documents to review before issuing a payout.
Such documents may include medical records, the medical examiner’s official report, an autopsy report, or the report made by EMS responders.
Types of Policies that Cover Suicidal Death
Several insurance types will cover suicide, but the requirements associated with each type can vary. Let’s examine the clauses and provisions that accompany four of the most common types of life insurance.
- Term Life Insurance: Term life insurance follows the guidelines mentioned earlier in this article. Most policies have exclusionary periods (usually between 1-3 years) in which the insurance company won’t pay death benefits in cases of suicidal death. After this period passes and the insured dies, beneficiaries will receive the payout.
- Whole Life Insurance: Like term insurance, whole life insurance usually has an exclusionary period. However, if an insured individual dies by suicide before the period passes, beneficiaries may still receive the policy’s cash value as a payout.
- Group Life Insurance: Group life insurance policies are usually provided by an individual’s employer; in most cases, they don’t have exclusionary period requirements. This means that if at any time an insured individual dies by suicide, the beneficiaries receive a payout for the death benefit.
- Military Life Insurance: Military life insurance has no exclusionary period attached to its policies. If an insured individual dies by suicide, the benefits are paid out regardless of the policy’s age.
In some situations, the methods used to take one’s life might make conclusions challenging to establish. For example, if an insured individual dies by ingesting a toxic amount of a specific substance, verifying that the death was intentional may not be entirely possible.
In cases where an insured individual dies due to alcohol poisoning, and no other indications of suicide are present (such as a note), the death might not be considered a blatant suicide. The terms and restrictions within the policy may or may not cover an alcohol-induced death.
The same can usually be applied to deaths caused by prescription drug overdoses. If an individual overdoses on legal, prescription medication and the exclusionary period is still active, the death may be covered if the medication was listed when the policy was issued.
In cases where an individual dies due to an overdose of an illegal drug, insurance companies will usually contest the death if the contestability period is still active.
If an insured individual commits physician-assisted suicide while the contestability period is still in place, the insurance company may or may not pay the death benefit. After the exclusionary periods have passed, so long as doctor-assisted suicide is legal (or the insurance company doesn’t have a clause barring it from coverage), the death should qualify.
Doctor-assisted suicide, or death with dignity, is legal in the following US states: California, Colorado, DC, Hawaii, Vermont, Washington, Oregon, and Montana.
How to Prevent Claim Denial
To reduce the chances of having a life insurance claim denied by the insured’s provider, it’s essential to provide all of the relevant information related to the policy at the time of an individual’s application. While this may result in higher premiums, claims are less likely to be denied when the insurance company is aware of any possible risks the insured individual faces.
It’s easy to worry about whether an insurance company will deny coverage if the individual applying for a policy discloses information about mental health conditions. Some insurance companies may deny coverage, but not all of them will. Explore the options available to find a company that will provide coverage based on a detailed, honest application.
When an individual seeks life insurance coverage, providing the following information (if relevant) is a must to avoid claim denials.
- Medication history that includes past and current medications
- Mental health diagnoses (even if the applicant does not experience suicidal thoughts)
- Substance abuse history
- Any risky hobbies the applicant partakes in (rock climbing, urban exploration, cave diving, etc.)
Upon approval, it’s essential to review the terms listed in the policy carefully. Even if the individual is provided coverage, insurance companies may add exclusions, limit the value of the death benefit, or require higher premiums to manage the risks associated with covering the insured.
These terms may be inconvenient, but they’re far better than contesting a claim denial that can occur when pertinent information is either undisclosed or falsified.
Beneficiaries should also keep a copy of the insured’s policy so that in the event of the individual’s death, surviving loved ones will have all the documentation they need to begin filing a claim.
In many cases, life insurance policies will cover suicidal death so long as the conditions outlined in the policy are met before the death occurs. Insurance companies put exclusionary periods in place to discourage suicide attempts brought on by financial hardship, but after those periods have passed, most suicides are covered.
To ensure your beneficiaries receive the death benefit in your policy with as little hassle as possible, read through your entire policy and ask plenty of questions throughout the application process. This way, you’re well-informed regarding the unique terms included in your policy.