Losing a loved one is a difficult period, but it becomes an even more significant burden if suicide is involved and you're unsure about your life insurance suicide clause. With so many financial arrangements and details, you must know whether you will get a suicide life insurance payout. This article will explain when a life insurance policy will cover suicidal death and when it won't.
Some life insurance policies have a suicide provision or suicide death clause, which stipulates that suicide within the first two or three years of policy activation may deny the death benefit.
If a policyholder dies because of suicide after the suicidal clause time frame, the death benefit can be paid out.
Life insurance policies without a suicide provision will generally pay the death benefit even in the event of suicide.
Does life insurance pay for suicidal death?
Suicide rates have increased by almost 36% between 2000–2021. In 2021, suicide was responsible for 48,183 deaths. With higher rates of suicide, more people are asking whether suicide can void life insurance. Likewise, more insurance companies are adding suicide death clauses to their policies.
What is the suicide provision designed to do?
Some policies have a life insurance suicide clause. This clause is designed to prevent someone from taking out a life insurance policy and committing suicide immediately after to provide their loved ones with a death benefit.
For that reason, your family might not receive a suicide life insurance payout if the death took place within the first two or three years of the policy being opened.
However, suppose the suicide exclusion period has expired. In that case, your life insurance policy will cover suicide and pay out the death benefit if no other violations are found during the contestability period.
Does term life insurance cover suicide?
It depends on your policy. Some term policies have a suicide provision or death clause. This clause explains when suicide is covered and when it isn't. Most suicide death clauses if suicide happens within the first 2– 3 years of the term.
Most group policies and some individual policies do not have this suicide provision. If they do not, then barring any potential investigation during the contestability period, your insurance policy will pay the death benefit to any beneficiaries.
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Does my life insurance cover suicide if I have a permanent or whole policy?
The answer is the same as a term policy: it depends on whether your policy includes a suicide provision. If it does, the insurance company may investigate the death and determine whether to deny or approve the death benefit. This investigation is based on any other suspicious circumstances or evidence that might arise indicating information was withheld or falsely presented on the original life insurance application.
If it does not, then the insurance company will pay out the death benefit to your beneficiaries. Your company may still choose to exercise the contestability period to review for any potential fraud but after that period, your beneficiaries will receive the death benefit.
Will group life insurance pay for suicidal death?
If you have a group life insurance policy, it likely came from your employer. Employers provide base coverage, and many employees are allowed to purchase supplemental coverage.
- For base coverage. Group life insurance does not typically have a suicide clause, so you will receive a death benefit for a suicidal death.
- For supplemental coverage. Supplemental coverage or riders you purchase may come with a suicidal clause, which may or may not pay out for a suicidal death.
Military life insurance coverage for suicidal death
Military insurance policies do not have a contestability period or suicide clauses if life insurance is taken out through Veterans Affairs. This means most military life insurance will cover suicidal death.
Military policies generally fall under group policies they are provided by an employer which means they are not individual policies. Employer or group-provided policies lack these clauses because it is statistically less likely that an individual is taking out a group policy provided by an employer right before a planned suicide.
What is the contestability period?
If your policy or the supplemental coverage you purchase from a group policy has a suicide clause, the approval or denial of your death benefit is contingent upon whether it violates the 2 to 3 year clause. However, even if you don't have a suicide provision, the death may be subject to the contestability period. The contestability period is the time frame immediately after your policy is activated. This is usually two or three years.
This contestability period allows your insurance provider to look at things like:
- Discrepancies in the original application.
- Health information that wasn't reported.
- Failure to disclose pertinent information.
If an insurance provider finds evidence of the above, it is considered life insurance fraud, and your death benefit will be denied.
Does life insurance cover physician-assisted suicide?
Physician-assisted suicide is legal in several states:
- New Mexico
- Washington D.C.
- New Jersey
However, suppose you live in a state with right-to-die laws, doctor-assisted suicide, or death with dignity statutes. In that case, you can only receive physician-assisted suicide under specific circumstances like a diagnosis of a terminal illness.
The state in which a policyholder activates a policy will greatly influence whether beneficiaries get a life insurance death benefit if the policyholder commits suicide using physician assistance. If a policyholder used doctor-assisted suicide, their death benefit will still be subject to the suicide provision if they had one, as well as the contestability period.
How long after suicide before beneficiaries get a death benefit?
This depends on your situation:
- If there is no suicide clause. And the insurance company doesn't contest the death, the insurance will pay the death benefit immediately.
- If there is a suicide clause. And the death takes place within that time frame, they will deny the death benefit because of a suicide clause violation.
- If it takes place outside of that time frame. The company might choose to investigate during the contestability period, which can take up to two or three years.
It's also important to know that a contestability period applies to all policies regardless of whether the death was a suicide. In most cases, as long as the death did not occur within the first two or three years of activating a new policy, life insurance companies will pay for suicide,
Is a contestable clause the same as a suicide clause?
A contestable clause refers to a specific length of time immediately after the death of a policyholder, wherein an insurance company can look for evidence of things like fraud and contest the death benefit. A suicide clause refers to a specific length of time immediately after starting a new policy wherein a suicidal death will not result in beneficiaries receiving a death benefit.
Do you get life insurance if you commit suicide?
After a death is ruled a suicide, any suicide exclusion clauses in your insurance policy will be reviewed to determine if the death benefit can be denied. Your insurance company also has the right to utilize the contestability period to determine if the death benefit is voided because of Life Insurance fraud. The life insurance company will pay the death benefit if neither situation applies.
What happens if insurance denies suicidal death coverage?
If your insurance company contests the claim and denies the death benefit, you can pursue legal action to receive your payout.
- CDC. Multiple Causes of Death.
- National Library of Medicine. Life insurance, living benefits, and physician-assisted death.
- NAMI. Suicide and Life Insurance.
- Americans United for Life. Physician-Assisted Suicide.