Does Life Insurance Cover Suicide?

One of the most painful things for people to deal with is the loss of a loved one due to suicide. There are over ¼ of a million people who survive suicide each year, but many people do not. Not only is this a painful experience emotionally, but it can also leave a person’s loved ones in an extremely difficult situation financially. Losing someone you love is very hard, and dealing with the added stress of a denied life insurance claim can bring questions of how the person’s family can move forward. After the devastation of suicide, here’s what you need to be aware of regarding life insurance. By knowing what to expect from your life insurance company, if a person’s cause of death is determined to be suicide, you can be better prepared for what comes next.

When Does Life Insurance Cover Suicide?

Depending on the type of life insurance policy that was purchased, as well as when it was purchased, a person’s life insurance policy may still pay out the death benefit to the beneficiary listed on the policy after a suicide occurs. For life insurance policies that are purchased within two years before the suicide happens, the death benefit of the plan might not be paid. There are many things you need to know to understand whether or not a life insurance carrier will still give a payout if a death is determined to be suicide.

Some years, 45,000 deaths or more are due to suicide. Often unforeseen by the loved ones that are left behind, suicide is a devastating tragedy that leaves people heartbroken. While family members should be able to benefit from a life insurance policy in the case of suicide, which can leave people financially burdened in unforeseen ways, there are conditions that need to be met for a payout to happen.

The circumstances surrounding a person’s death are primary factors that determine whether or not the beneficiaries are eligible for a payout if the suicide occurs. There are generally two clauses in a life insurance policy that touch on suicide. The first of these is called The Suicide Provision, and the second of these is called The Incontestability Clause.

These clauses are meant to deter people from only buying policies because they want to leave money to their families after a planned death or suicide. Included to protect insurance companies, knowing what these clauses are, and what they are utilized for, is vital.

The Incontestable Clause allows insurance providers to deny a contest the claim for a number of reasons, so long as it is within the first two years of the insurance plan. One of these reasons is suicide, meaning that a person can be denied death benefits from a life insurance plan if a person commits suicide or plans their death within the first two years of the policy. With all instances considered, not just suicide, The Incontestability Clause is the most common reason an insurance provider denies a life insurance claim in the first two years of a plan being purchased. After these two years have passed, however, a life insurance claim becomes incontestable. There are exceptions to this, which include more serious issues such as misrepresentation and/or fraud. 

Also, policies can have a Suicide Provision, which further addresses the conditions in terms of payouts when it comes to suicide. Finding out what exclusions are in this clause is essential, and claims on the policy can be denied if the conditions of the clause state that no death benefit will be paid out if the person insured commits suicide, or suicide is determined to be the cause of death. When you buy a life insurance plan, the insurance representative has an obligation to explain all of the clauses in your policy, as well as the policy conditions, to you.

There are situations when a life insurance policy will pay out for instances of suicide. After the suicide provision period, and when The Incontestability Clause term is up, a life insurance plan may pay the death benefit on a claim for suicide. This payment goes to the beneficiaries, though it is essential to check the suicide provision in your policy, as each policy has different exclusions and terms listed in it. If no exclusion or clause for suicide is indicated, and suicide is determined to be the cause of death, a life insurance policy will pay out the benefit.

Drug Overdose Or Alcohol And Death Benefits

Depending on the circumstances of the drug overdose or death due to alcohol, your policy might not payout. It all depends on your policy's exclusions. For people who, for example, accidentally took too much of prescribed medication, the death will typically be covered as long as the reasons for taking the medications, and what the medications are, were disclosed to your insurance carrier when you purchased the policy. Insurance providers can still contest and possibly deny a claim if the death occurs while the incontestability period or suicide clause is in force. The insurer, in this case, would need evidence that the death was intentional, however.

Since death during illegal activities is also not covered, illegal drug overdoses that fall within Thee Incontestability Period are often denied. Even when not considered suicide, the clause takes into consideration the illegal act that was occurring when the death happened. A claim may be paid if the insured disclosed all related information while submitting their application, so long as the period of incontestability and the suicide clause period have ended. If the insured stated that they were attending drug treatment programs, it could have an impact on the decision. In addition, policies can have additional clauses that mention dangerous activity, as well as illegal activities, in their exclusion section.

It is similar when it comes to alcohol-related deaths. Failure to disclose information about alcohol abuse history, alcohol abuse treatment, mental health, or information about your drinking behavior, can result in claim denial. Also, if the insurance company is able to find evidence that the insured intentionally tried to kill themselves, it would be within their ability to deny a claim if it is within the incontestability clause term or suicide provision period.

How To Prevent A Denied Life Insurance Claim After Suicide

The most important thing to do to prevent being denied life insurance claims after a suicide is to contact your life insurance representative to find out the exact details of your policy and how long the incontestable clause lasts in specific situations. Keep in mind that if the policy has been valid for less than two years, insurance providers can investigate death benefit claims and deny them if suicide is determined to be the cause of death. In addition to The Incontestable Clause, policies can have a suicide provision or clause in them.

Policyholders should be aware of the suicide provision or clause if they are part of the policy. This part of a plan touches explicitly on death by suicide and deaths determined to be suicide. While there is some overlap between the Suicide Provision and The Incontestability Clause, they are different. The Incontestability Clause can also include things like deaths that happen during an illegal act, deaths due to drug abuse and alcohol, and the misrepresentation of information, among other things. Keep in mind that doctor-assisted suicide, also called death with dignity in some states, may be considered illegal and result in no payout. Knowing the specifics of the policies you are interested in is essential, so make sure to do your research, ask about specifics, and use the tools on this website to find the best policies available. Comparison-shopping can provide benefits, and can be done quickly and efficiently on this website.