Choosing a life insurance policy is an important decision. If you are considering purchasing life insurance coverage from a trusted provider, it’s important to understand the ins and outs of your policy.
For example, how does your life insurance policy handle suicidal death?
Many people think that life insurance does not cover death by suicide, but the reality is that it depends on the specifics of your policy.
What Is a Life Insurance Suicide Clause?
Life insurance policies typically include a suicide clause, also known as a suicide provision. Under this clause, insurers will not pay out the death benefit if the policyholder’s death was caused by suicide or self-inflicted injury.
Suicide clauses outline an exclusion period, during which the clause is in effect and suicidal death is not covered. This period is usually two years after the start of the policy but can last from one to three years depending on the specific insurer and life insurance plan.
If the policyholder dies by suicide after the exclusion period ends, their beneficiaries may be able to receive a death benefit.
Not all life insurance policies include a suicide clause. Group life insurance, such as coverage through an employer or organization, usually treats suicide differently than traditional life insurance. Military life insurance plans are also likely to cover suicidal death.
Why Do Life Insurance Policies Include a Suicide Clause?
Suicide is a leading cause of death in the United States. The Centers for Disease Control and Prevention (CDC) estimates that there were 1.2 million people who attempted suicide in 2020. The last thing an insurance company wants to do is give someone a financial incentive to commit suicide.
That’s why so many providers include suicide clauses in their life insurance policies. These provisions are meant to stop someone from purchasing a life insurance policy as a way to compensate their surviving loved ones after their intentional death.
When Do Life Insurance Policies Cover Suicidal Death?
Life insurance policies may cover suicidal death in either of the following situations:
- The policy does not include a suicide clause
- The suicide clause is no longer in effect because the exclusion period has ended
In these cases, provided that the other terms of the policy have not been violated and the insurer doesn’t have another reason to contest the claim, the insurance company will pay out the death benefit.
Note that the clock of the exclusion period restarts any time the policyholder makes a change to their policy. If they add coverage or change policy types, the suicide exclusion period will start over.
How Does an Insurance Company Determine Whether Someone Has Died by Suicide?
In most cases, insurance companies verify the death of the policyholder through the death certificate and then pay out the death benefit to their beneficiaries. However, if the insurer suspects the death may have been caused by suicide, they will investigate further.
The insurance company request an autopsy report, a medical examiner report, or other documentation to determine whether the policyholder committed suicide. It often takes longer to investigate suspected suicidal deaths as compared to other causes of death, so beneficiaries can expect to experience a delay in receiving the death benefit—if the policyholder’s death is determined to be covered by the terms of the life insurance policy.
Contact Melton McFadden to Get Life Insurance in Michigan
At Melton McFadden, our experienced insurance professionals can help you develop a life insurance plan that protects your loved ones and gives you peace of mind. We are ready to guide you through the process of choosing a life insurance plan, finding gaps in your current coverage, and creating a solution that works best for you and your family.
Whether you are looking to explore options for life insurance coverage or expand your existing policy, we’re here for you every step of the way. Contact us or request a free quote to get started today.