Life insurance policies pay a death benefit to designated beneficiaries when the policyholder dies. Many people purchase life insurance to make sure there is money available to provide for loved ones and family members if they pass away. The life insurance company will pay out in case of death due to accidental death or illness that causes death.
Sometimes, however, someone may have committed suicide. If a policy owner commits suicide, collecting on a life insurance claim can become much more complicated, because the insurance policy may not pay out the death benefit to beneficiaries.
Whether the insurer pays or not depends upon the suicide clause in the insurance policy. It’s important to understand how suicide clauses work, as well as to understand other factors that could affect whether a life insurance policy pays for suicidal death.
On this page:
- What Are Life Insurance Suicide Clauses?
- How Long Does a Life Insurance Suicide Clause Typically Last?
- Other Things to Know About Life Insurance and Suicide
What Are Life Insurance Suicide Clauses?
Virtually all standard issue life insurance policies contain a suicide clause. Suicide clauses are policy provisions in the insurance contract that impose limits on when the policy will pay a death benefit in the event that the insured takes his or her own life.
These clauses typically specify that the insurer will not pay out the death benefit if someone passes away due to committing suicide shortly after purchasing or increasing insurance coverage.
Life insurers will investigate the cause of death during a time period prior to paying out a death benefit, so insurers will know if someone dies by suicide and the suicide clause applies.
Insurers also conduct investigations in the event of a potential suicide connected to substance abuse, so if you die by an overdose but the insurer deems it to be a suicide, the death benefit may not be paid.
How Long Does a Life Insurance Suicide Clause Typically Last?
Insurers vary in the rules they apply when a policyholder takes his or her own life. In a very small number of cases, insurers don’t have suicide clauses, but almost all standard issue life insurance contracts do have these policy provisions. However, the specific length of time the suicide clause precludes a payout of the death benefit will vary from one insurance company to another.
Many insurers won’t pay out a death benefit if a policyholder dies by suicide within the first two years of obtaining coverage, while others may have a longer or shorter waiting period.
Most insurers also extend a waiting period or put a waiting period in place if a policyholder significantly increases coverage. For example, if you had $100,000 of insurance and you upgrade to $1 million in coverage, then a suicide clause may go into effect specifying that the additional $900,000 in death benefits won’t be paid to beneficiaries for at least two years after the coverage upgrade.
Insurers put these clauses in place to make sure people considering suicide don’t buy or increase life insurance in anticipation of taking their own life.
Other Things to Know About Life Insurance and Suicide
When you buy a life insurance policy, you will be asked about a history of suicide and suicidal thoughts and any mental illnesses that you have been diagnosed with or exhibited symptoms of.
If you are not forthcoming and fail to disclose a history of suicide attempts, or if you lie about your mental health condition, this could be considered a material misrepresentation and you may not get individual life insurance.
In some states, material misrepresentation will void an insurance contract. That means that the insurer won’t have to pay out the death benefit after you pass away.
Even if the waiting period in your suicide clause ended long ago and you’ve had the policy for many years, the insurer wouldn’t have to pay if you failed to disclose a mental health issue on your application and your application was thus deemed fraudulent. In other states, the insurer may still have to pay some of the death benefit but could reduce the amount of money paid out.
Insurers will investigate whether you failed to disclose a history of suicide or a suicide-conducive mental illness on your insurance application if you die by suicide and your beneficiaries attempt to claim the death benefit.
Death by Suicide Is Sometimes Covered
When someone dies by suicide, a life insurer will typically pay out the death benefit to beneficiaries if a long enough time has passed since the policy was purchased. A suicide clause in the insurance policy will specify how much time must pass after a policy is purchased or coverage is upgraded before the insurer pays a death benefit after a suicide.
Whether your insurer will pay your death benefit or not, suicide is not the answer. If you are currently contemplating suicide, there are many resources available that can help you.
You should contact the National Suicide Prevention hotline at 1-800-273-8255. This hotline is open 24/7, and someone is always available who can provide the assistance and support you need. You should be there to provide for your loved ones so they aren’t forced to count on a life insurance payout, so please call to get help if you are thinking about taking your own life.