Yes, life insurance can cover suicide but becomes challenging if the insured life insurance policy is still active. In most situations, beneficiaries can still obtain a payout despite the cause of death being suicide. However, it’s important to note that there are exclusions that could potentially nullify such claims.
Generally, it does not extend coverage for suicide in the initial two years of the policy but beyond the initial period and offers coverage to a suicide clause. Moreover, if the policyholder dies by suicide more than two years after securing the insurance, the policy will disburse the death benefit to the beneficiaries.
What Is Life Insurance Suicide Clause
A suicide clause is regularly in effect for a period of two to three years after a life insurance policy starts. Within this duration, the clause permits an investigation into the circumstances surrounding the insured’s death. Moreover, if the insurer, law enforcement, or medical examiner provides evidence that the policyholder’s demise is suicide during this specified period, the insurer owns the right to reject a beneficiary’s claim for the life insurance death benefit.
How Suicide Clauses Work
Life insurance providers cover suicide clause, also referred to as a suicide provision, to prevent individuals from having a financial motive to end their lives. Moreover, the insurer will not disburse death benefits if the individual dies by suicide within the initial two years of coverage, known as the exclusion period.
Once this exclusion period concludes, beneficiaries can obtain the death benefit in the event of the insured individual’s suicide. However, any modification, like including coverage or changing a term policy into a whole-life policy, can reset the timer, prompting the exclusion period to commence.
When Does Life Insurance Cover Suicide
Despite common belief, life insurance can provide coverage for a policyholder’s death by suicide, provided that certain conditions are not violated. Additionally, it’s beneficial to check the policy for precise details. However, it’s important to note that beneficiaries may still receive the death benefit in the event of suicide.
Military Life Insurance
Certain military life insurance policies personnel stand out due to their feature of disbursing the death benefit to selected beneficiaries irrespective of the cause of death. These personnel include such as those provided by Veterans’ Group Life Insurance (VGLI) and Servicemembers’ Group Life Insurance (SGLI). Moreover, if the policyholder passes away resulting from an act of war or suicide, the life insurance policy could still offer the designated beneficiaries the death benefit.
Accidental Death
To determine if accidental death is covered by a life insurance provider or not is usually based on two factors. This includes the situation of the death and the information disclosed by the insured to their life insurance provider during the policy application process. For example, if the policyholder passes away due to a drug overdose and discloses the prescription when applying for the policy, the beneficiaries could obtain the death benefit.
However, life insurance policies do not cover death resulting from an illegal drug overdose. In addition, the majority of life insurance policies add suicide clauses, which must end before coverage for suicidal death is active. However, once these clauses have expired, beneficiaries may obtain the death benefit selected by the policyholder.
Life Insurance Death Benefit After A Suicide
While obtaining life insurance after a previous suicide attempt can be difficult but is not impossible. However, the application process will involve manual underwriting. During this period, insurers will ask for details regarding the suicide attempt, including its timing, whether it was the first occurrence, and if the applicant is undergoing any treatment.
Revisiting such experiences during this evaluation may be distressing for some individuals, but it cannot be left out. Furthermore, the details can estimate monthly premiums depending on the type of risk the insurer associates with the applicant. However, these rates may be adjusted if the risk is minimal or if the insurer receives evidence of ongoing treatment.
How Does Insurance Company Know If Someone Died By Suicide
If a policyholder passes away and their beneficiaries submit a claim, the insurance provider will request a death certificate. Additionally, this document indicates the cause of death and states whether it was suicide or not. Moreover, whether the death certificate is inconclusive or lists a questionable cause of death, the insurer may ask for extra documentation.
This documentation includes an autopsy report, a medical examiner report, an emergency medical services (EMS) report, or the deceased person’s medical records. Since investigating deaths by suicide could consume time, beneficiaries may encounter delays in getting the benefits from the life insurance policy. Although the claims process can be complex and time-consuming, beneficiaries should try to file a claim.
Conclusion
Lastly, it’s important to note that life insurance does not cover suicide during the initial two years of a policy, commonly known as the suicide clause period. However, if the initial period concludes, the policy will typically provide a death benefit for suicide.