In this article, I wanted to answer a common question I get. That question is does life insurance pay for suicidal death?
Whether it will pay for suicide or not will primarily depends on four things.
Those four things are:
- What kind of life insurance is it?
- Where do you live (or live when you bought the policy)?
- How long have you had the policy?
- Has the policy ever lapsed and then been reinstated?
Knowing the answers to these questions will help you know whether or not a life insurance policy will pay for suicide.
Since suicide is the 10th leading cause of death in the United States, let’s talk more about how insurance companies handle suicide and then go into some other important things you might need to know.
Generally, the suicide clause in a life insurance contract excludes payment for suicide for the first two years
It’s common for individual life insurance contracts to have a suicide clause. The suicide clause may allow an insurance company to deny payment for death caused by suicide for the first two years the life insurance is inforce.
However, after two years have passed, unless the policy has been reinstated (see below), suicide would no longer be excluded.
While this is the general rule, you actually need to know a few more things to determine if and how a suicide clause might apply.
What kind of life insurance is it?
Whether a life insurance company will pay for suicide first depends on what kind of life insurance it is. Let’s talk about three types and how suicide might be treated.
- Is it group life insurance through your employer? Group term life insurance may not cover suicide at all. You’d have to read the group contract to see how suicide is handled. The group contract is the agreement between the insurance company and the employer that governs how the group life insurance works.
- Is it individual life insurance? Individual life insurance will likely have a suicide clause. As I mentioned above, this clause is generally in affect for two years however it might depend on where you live or where you bought the policy.
- Is it an accidental death policy or an accidental death benefit rider? If the policy is an accidental death policy then suicide is probably totally excluded no matter what. This would also be the case for for any accidental death benefit riders, both on group term or individual life insurance.
As you can see, it’s important to know what kind of life insurance it is. If you are dealing with individual life insurance, then there are three other things that might affect a claim because of suicide.
Where do you live (or where did you live when you bought the policy)?
While most states in the United States allow insurance companies to exclude suicide for the first two years the policy is inforce, there are a couple of states that only allow for suicide to be excluded for the first year.
If you buy a policy in one state that limits the suicide clause to one year and later move to another state that allows it to be excluded for two years or vice versa, I’m not really sure what state would apply.
For those reading this that have bought their life insurance outside the United States, the best advice I can give is that you’d have to read your life insurance contract.
How long have you had the policy?
Since suicide is generally excluded for the first two years the life insurance is inforce, the next thing you’ll want to figure out is how long have you had the policy.
Keep in mind that the date you applied for the life insurance and the actual policy date might be two different things. Most likely, the policy date is probably when the exclusion period might begin.
Has the policy ever been reinstated?
If you have ever let your policy lapse and asked the insurance company to reinstate the policy, the time the suicide clause would be in effect would be reset and start all over again.
This means that even if you have had your policy for 4 years, let your policy lapse and then request that it be reinstated, you’d likely have to wait another two years before suicide would be covered again.
Always file a death claim when someone dies
No matter how someone dies, you should always file a claim and make the insurance company make a formal decision.
If the death was due to suicide and then denied under the suicide clause, the insurance company will probably refund the premiums paid.
Get legal advice if it’s unclear if it was an accident or suicide or for other legal questions
The insurance company will rely on the certified death certificate for the cause of death. If the death certificate says the death was a suicide, that’s what they’ll most likely go by.
But, things are often not so simple. I once had a case where a policyholder accidentally shot herself but they ruled it a suicide later.
In cases like that, it’s not really clear what happened. You might need to contact an attorney for legal advice.
If you are contemplating suicide, please ask for help
If you are reading this because you or a family member are contemplating suicide, please get help. Reach out to the National Suicide Prevention Lifeline at (800) 273-8255.
In general, life insurance companies exclude suicide for the first two years an individual policy is in effect. You’ll want to read the actual life insurance contract to see what kind it is, what state you bought it in and how long you have had it.
Have you had to file a death claim for suicide? Let me know in the comments what your experience was with the insurance company.
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