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  • Writer's pictureAhsan Malyk

Does Life Insurance Pay For Suicidal Death in US?

Updated: Sep 9, 2023

The death benefit is paid out by life insurance companies for practically every kind of death that might occur. However, insurance companies often do not pay out claims for deaths due to suicide in the first few years after the purchase of the policy.

The suicide clause in your insurance policy specifies the specific time frame during which it will not cover death. After that point, your life insurance policy will provide coverage in the event that you commit suicide.

Does life insurance payout if someone takes their own life?

Life insurance firms will begin paying compensation for suicide deaths after a waiting period of two to three years. Your life insurance contract has a condition referred to as a "suicide clause."

It specifies that if the insured person commits suicide while the policy is still active, the insurer has the right to deny payment of the entire death benefit. This is true for private life insurance policies too, regardless of whether they are term or permanent.

The specific time period during which an insurer does not cover suicide or death varies from policy to policy. However, most of the time it is two years.

Because of this rule, it is impossible for an individual to purchase a life insurance policy and then promptly take their own life. Beneficiaries of a perpetual insurance policy get a return of any premiums and potentially some monetary value.

However, this won’t be the death benefit that was originally promised under the policy.

Suicide provision in group life insurance policies

Due to the fact that these plans often renew yearly during open enrollment. They typically do not contain a suicide clause. Employer-sponsored group life insurance policies are an exception to this rule.

This indicates that your group life insurance policy will most likely make a payout for any cause of death at any given moment. Asking the company's benefits manager is the best way to determine whether or not group insurance covers suicide.

How your mental health might affect the premiums you pay for life insurance?

When you apply for life insurance, the provider will assess both your physical and mental health. This is to calculate the level of risk associated with taking you on as a client. Insurers will inquire about your treatment and hospitalization history if they suspect that you have depression.

This is because of the correlation between depression and an elevated risk of suicide.

Higher rates are likely to result from a previous history of self-inflicted injuries or hospitalization. However, if you can provide documentation that you have had treatment in the form of medicine and/or counseling, you may still be eligible for more favorable premiums with some insurance providers.

Does your life insurance policy cover assist suicide by a doctor?

The concept of "right-to-die," also known as "death with dignity" or "doctor-assisted suicide," describes a scenario in which an individual decides to end their life with the assistance of a medical professional rather than endure a diminished quality of life following the diagnosis of a terminal illness.

Within the first two years of a life insurance policy, the majority of insurers do not provide coverage. Death with dignity is equivalent to other types of suicide deaths. However, this varies widely depending on the state in which one resides.

In states that have passed "death with dignity" statutes, life insurers can make payouts even during the suicide exclusion period. There are laws in place for "death with dignity" in nine states and the District of Columbia

● California

● Colorado

● Hawaii

● Maine

● New Jersey

● New Mexico

● Oregon

● Vermont

● Washington

If you have concerns about the specifics, the recommendation is that you see both your primary care physician and an attorney. The specifics will vary depending on your situation and region.

Life insurance suicide clause vs. contestability term

The contestability period is a provision in life insurance plans that gives the insurer an additional clause that gives them the ability to refuse or lower the death payment.

The contestability period is not the same as the suicidal death exclusion period, despite the fact that the two periods sometimes overlap.

The contestability period typically lasts for the first one to two years of your policy. It gives the insurance company the right to examine any fatalities that occurred during that time for signs of fraud.

If it is revealed that you lied on your insurance policy application, the firm has the right to refuse to pay a claim or pay out a lower sum than what was originally agreed upon.

Even while both contestability and the suicide exclusion are only in effect for a few years at a time, they both begin again if your policy is allowed to expire due to nonpayment and then has to be reactivated.

Frequently Asked Questions

What exactly is the "suicide clause" in my life insurance policy?

A suicide clause is an exclusion in a life insurance policy. It stipulates that an insurer will not pay out for the death of a policyholder due to suicide within the first two to three years that the policy is valid.

If a patient chooses to end their life with the help of a physician, would their life insurance policy be paid out?

After the first two years of a policy's duration, coverage for physician-assisted suicide will be included in life insurance plans. In jurisdictions where there are laws addressing dying with dignity, insurers may pay out at any time in certain circumstances.

Is there a correlation between a history of self-harm and life insurance premiums?

If you have a history of self-harm on your medical record, you may have to pay a higher premium. Applicants currently receiving therapy for their bodily or mental health are, on the other hand, seen positively by providers.

Take Away

If you disagree with the decision of insurance to refuse a claim due to suicide, you should look into the state laws. Many jurisdictions have laws that protect you as a beneficiary in the event that an insurer denies a claim due to suicide.

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