There are no simple solutions after the suicide of a loved one, but one issue you may have is whether or not their life insurance policy is still in effect. The policy’s beneficiaries may still get the death benefit even if the policyholder committed suicide. However, certain exceptions could render such a claim useless. So, in this article, we will explain the ins and outs of a life insurance policy to help you through this trying time.
What is the Life Insurance Suicide Clause?
Simply put, a suicide clause is a provision in a life insurance policy.
Two or three years after a life insurance policy takes effect is often when a suicide clause kicks in. The clause provides a window of time to investigate the policyholder’s death.
A life insurance suicide benefit may be denied to a beneficiary if the insurer can prove the policyholder committed suicide within two or three years of the policy’s inception or if law enforcement or a medical examiner determines that the death was a suicide.
How Can a Life Insurance Company Determine If a Policyholder Has Committed Suicide?
A death certificate is required when beneficiaries of a deceased policyholder submit a claim to the insurance company. If the person’s death were a suicide, the death certificate would also indicate that.
The insurance company may request an autopsy report, medical examiner’s report, EMS report, or the patient’s medical records if the cause of death listed on the death certificate is ambiguous or otherwise raises questions. A delay in obtaining the life insurance payout is possible if the death resulted from a suicide investigation. Beneficiaries shouldn’t let the longer and more involved claims process discourage them from doing so. While trying to recover financially from the catastrophe, they may be eligible for benefits.
Does Life Insurance Cover Suicide?
After the first two years of a life insurance policy, suicide is typically covered. Suicide clauses often cover a time frame of two years. Death benefits from life insurance policies are paid out to beneficiaries if a suicide occurs more than two years after the policy was purchased.
When Does Life Insurance Cover Suicide?
Life insurance policies will pay out if certain conditions are met, even if the insured commits suicide. Suicide may still result in the death benefit being paid to the beneficiaries. However, it is helpful to review the policy for the specifics.
#1. Armed Forces life insurance
No matter the cause of death, the beneficiaries of the insured receive the death benefit from military-specific life insurance policies like Veterans’ Group Life Insurance (VGLI) and Servicemembers’ Group Life Insurance (SGLI). The policy may still pay out if the insured person dies in a battle or commits suicide.
#2. Death By Accident is Sometimes a Murky Subject
The policy terms and the insured’s honesty throughout the application process are the two main factors in determining whether or not a life insurance policy will cover an accidental death. The insured’s beneficiaries may still collect the death benefit in the event of the insured’s death due to a prescription medication overdose if the insured declares to the insurance company that they took prescription drugs at the time of application. But in most cases, insurance won’t pay out if someone dies from using an illicit drug.
When does Life Insurance not Cover Suicide?
During the first two years of your coverage, safeguards are in place to protect the insurance company against fraud. The insurer is not obligated to pay the death benefit if the policyholder committed suicide, engaged in an activity expressly excluded from coverage, or provided false information on the application.
Most life insurance contracts have the following clauses, which typically continue for two years. There is a lot of overlap between these time frames, yet each serves a unique purpose.
There is a suicide clause, a contestability period, and an exclusionary period.
What is a Suicide Clause
A language in an insurance policy known as a “suicidal death clause” specifies that the policy will not pay out in full if the insured dies by hand. The suicidal death clause, commonly known as a suicide exclusion, is a standard part of most insurance policies.
Provision — is valid for two years. After that point, suicide will not result in any reduction of benefits.
This provision is intended to safeguard both the insurer and the policyholder. Because of the suicidal clause, a policyholder cannot take their own life to leave money to a beneficiary.
The beneficiary of a perpetual insurance policy will get a refund of premium payments and, if applicable, cash value if the policyholder commits suicide within the first two years.
The Exclusion Period How Does it Work
The insurer has the right to withhold the death benefit during the exclusion period, typically the first two years of the policy’s existence. During this time, the suicide provision will be in effect.
If you commit suicide while the exclusion period is in effect, your beneficiary may not be entitled to the full death benefit. After the waiting period expires, the insurance company must pay the death benefit for any cause of death, including suicide. There won’t be any loopholes in your coverage.
What to do if Your Claim for Suicide Benefits is Turned Down
The life insurance company can dispute or deny a claim if it has reasonable suspicion that the insured died of suicide or an uninsurable cause within the exclusionary period. However, as the beneficiary, you can challenge the insurer’s decision, albeit doing so effectively may necessitate planning.
#1. Obtain Written Notice of the Claim’s Denial
The determination of the cause of death is often left to the medical examiner or the police by life insurance companies. However, the firm may conduct its inquiry if it has grounds to suspect that the insured’s cause of death may render a beneficiary’s claim to the death benefit invalid. The following are examples of factors that an insurance company might take into account during an investigation:
- Drug or alcohol abuse report
- Autopsy report
- Death certificate
- Health documents, including any psychiatric evaluations
- Family and friend testimonies and any physical evidence of criminal activity.
- Weapons purchases
- A possible suicide note:
The insurer will typically issue a claims denial letter explaining why it is not paying the death benefit after it has finished its investigation. If you plan to appeal the insurer’s decision, this claims denial letter will be helpful.
#2. Make Sure the Insured Hasn’t Lied on the Application
One common cause of life insurance claim denial is dishonesty. Misrepresentations in life insurance policies typically involve information the insured failed to disclose to the insurance company during the application process. Claims could be denied if, for instance, the insured has a history of chronic conditions like a heart murmur or is a lifelong smoker. However, they did not disclose this information to the insurance company when they first applied for coverage.
Suppose you were the beneficiary of a life insurance policy, and your claim for the death benefit was denied. In that case, you may want to look into whether or not the insured made any material misrepresentations on the application. Remember that incorrect information about the insured’s income or immigration status can also result in a voided life insurance policy.
#3. Check The Laws In Your State
Insurance laws safeguard beneficiaries in some states. Examine your state’s life insurance contestability laws and learn the rules for exclusionary periods. Different states have different rules for challenging contracts, which shortens the period in which an appeal can be filed. Furthermore, new suicide clauses in converted policies may be invalid in some states.
#4. Collect the Necessary Information and Get in Touch with the Insurance Company
Contacting the insurance company directly is one viable option for appealing a life insurance decision. Proof of premium payments, medical records, and even an autopsy report could all help get the ball rolling. In most cases, the beneficiary will hear from the life insurance company about the paperwork needed to start the appeals process.
Life Insurance Death Benefits After Suicide
Suppose a suicide occurs within the first two years of a policy. In that case, the beneficiary may be eligible to receive a refund of the premiums paid into the policy before the death.
Suicides with medical assistance are not counted toward the limit. California, Colorado, Oregon, Washington, and Vermont are the five states that allow assisted suicide.
You will need a certified copy of the death certificate and the name of the insurance company holding the policy if you are a life insurance policy beneficiary.
Does Life Insurance Cover Doctor-Assisted Suicide
The term “right-to-die” or “death with dignity” is often used interchangeably with “doctor-assisted suicide,” which describes a situation in which a person voluntarily ends their life with medical assistance. The first two years of a life insurance policy typically do not cover suicide or assisted suicide.
The rules here may be different depending on where you call home. Some states with “death with dignity” laws permit life insurance payouts even if the insured person committed suicide during the “exclusion period.” Death with Dignity legislation is in place in nine states and DC.
- The Golden State and the Mile-High State
- U.S. Federal Capital Territory
- Hawaii
- Maine
- New Jersey
- New Mexico
- “Oregon.”
- The States of Vermont and Washington
How Does Hotline Work?
Providing a chat service for a helpline, hotline, or crisis line is simple. When you need to talk to someone who can listen, give advice, make recommendations, and offer solace, you pick up the phone or send a text.
How Do I Get Help for Mental Health?
- You can reach a crisis centre anytime by dialling 988 (or texting 988lifeline.org), texting MHA to 741741 (or calling 911), or visiting your local emergency room.
- Locate a member agency of the Mental Health Association in your area.
- Seek out a counsellor.
- Look for local help groups.
- Find a medical centre.
What Does it Mean to Have the Thought of Death?
Anxiety and sadness are both potential causes of morbid preoccupation with death. Fear of your own or a loved one’s death could be one of them. Even if these thoughts aren’t harmful in and of themselves, our fear causes us to become obsessed with them.
How to Get Help from Mental Health?
Individuals and families dealing with mental and substance use disorders have access to a confidential, free, 24-hour, 365-day-a-year information service in English and Spanish via SAMHSA’s National Helpline, 1-800-662-HELP (4357; also known as the Treatment Referral Routing Service), or TTY: 1-800-487-4889.
Can You Text Hotlines?
Yes, anytime, anywhere in the United States, you can text “HOME” to the number 741741. If you’re ever in a bind, you can text the Crisis Line. Our secure online technology immediately forwards the text to a real-life crisis counsellor, who replies.
Conclusion
Life insurance may provide coverage in the event of suicide, but many policies have clauses restricting the payment of death benefits in such circumstances. Also, during the “exclusion period,” which typically lasts the first two years of a policy’s coverage, benefits may be withheld if the policy is relatively new.
Most term life policies have waiting periods before paying out on a suicide death, while many group life policies do not. The cash value of a whole-life policy may be paid out to beneficiaries even if the insured passes away during the waiting period. However, beneficiaries shouldn’t let that stop them from filing a claim if they believe they are eligible for benefits that could help them through a challenging time.
- BASIC LIFE INSURANCE: What Is It & How Does It Work?
- WHOLE LIFE INSURANCE: What Is It & How Does It Work
- INSURANCE RIDER: What Is It & How Does It Work?
References
