Does Life Insurance Pay for Suicidal Death?

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A Life insurance policy will usually cover suicidal death if the policy was purchased at least two to three years before the insured person died. There are not many exceptions, because after this waiting period, a life insurance policy's suicide clause and contestability period expire. However, the beneficiary's claim can still be denied if the insured person didn't disclose information at the time they purchased the policy, such as risky behaviors or a diagnosis for depression.

When does life insurance cover suicide?

Individual life insurance generally covers suicide if it occurs after the policy's suicide clause and contestability provision have expired. Once these exclusions are no longer in effect, usually two to three years after a policy was purchased, the life insurance policy will typically cover suicidal death.

  • Contestability period: This typically extends for the first two years, during which the insurance company can contest or deny a claim for various reasons. If they believe the policyholder committed suicide during this period, they will investigate the circumstances of the death, and theclaim may be denied. Once the contestability period expires, the incontestability clause kicks in. A claim cannot be contested, except in serious cases, such as misrepresentation or fraud on the application. Minor misstatements cannot cause a claim to be rejected.
  • Suicide clause: Also generally lasting two or three years, this clause gives companies the ability to investigate claims during this period. They are allowed to deny coverage if the policyholder intentionally caused their own death. If the company can demonstrate that the insured person intentionally killed themselves or the death was ruled a suicide, the policy will be negated and the beneficiary's claim denied.

While these clauses are similar, the contestability provision is broader. It also addresses other events that can result in a claim denial during the waiting period, such as dying during an illegal act.

The contestability period allows companies to void coverage in certain cases, such as inaccurate information on the application. The suicide clause, on the other hand, protects companies from having to pay claims if the person who bought the policy intended to kill themselves and leave money to their beneficiary.

When changing life insurance policies, even with the same company, the contestability period and suicide clause go back into effect. So there would be another waiting period during which claims would be denied for suicide. However, this is not generally the case if the policy is only converted.

If a term life insurance policy were converted to a whole life insurance policy with the same death benefit, there would be no new contestability period. But, if two term life insurance policies were switched to a single policy with a larger face value, the suicide and contestability provisions would begin again.

If the insured person dies during the contestability period and it's determined to be a suicide, the beneficiary would not receive the policy's death benefit. But they may receive the sum of premiums paid. However, if a cash value life insurance policy had money borrowed against it, the amount of the loan would be deducted from the payout the beneficiary would receive.

Does group life insurance cover suicide?

Group life insurance, such as through an employer or organization, covers suicide differently than individual life insurance. If a group life insurance is entirely paid for by an employer, it will generally cover suicide with no restrictions during the first two years. On the other hand, supplemental life insurance purchased from an employer will likely include a suicide clause or contestability period.

Does military life insurance cover suicidal death?

Members of the military and veterans who have life insurance through Veterans Affairs are generally covered in cases of suicide. VGLI and SGLI military life insurance policies include coverage for suicide, as there's no contestability period or suicide clause.

Life insurance gray areas

Most life insurance policies cover "natural death," which can include accidental death, suicide, health issues and a variety of natural causes, as long as none of the policy's exclusions are triggered. The challenge for beneficiaries is that it may be unclear if a death was a suicide. In that case, the death could be contested during the suicide clause waiting period. There may also be issues if another exclusion in the contract was triggered, such as dangerous or illegal activity.

Does life insurance cover 'death with dignity'?

As long as the contestability and suicide provisions have expired, a life insurance policy should cover doctor-assisted suicide, also called "death with dignity." However, the policy document would need to be consulted to make sure there are no additional exclusions that would void the policy.

For example, an illegal activity clause could prevent the beneficiary from receiving the death benefit if the policyholder died from doctor-assisted suicide that didn't comply with regulations. There are only 10 states, plus Washington, D.C., where death with dignity is legal in certain scenarios:

  • California
  • Colorado
  • District of Columbia
  • Hawaii
  • Maine
  • Montana
  • New Jersey
  • New Mexico
  • Oregon
  • Vermont
  • Washington

Does life insurance cover death due to drug overdose or alcohol?

Life insurance may cover a drug overdose or death related to alcohol. It depends on the circumstances of the event and the policy's exclusions.

An accidental overdose, such as if accidentally taking too much of a prescribed medication, will typically be covered if the medications and the reasons for taking them were disclosed in the application. The insurance company could contest a claim if it occurred during the waiting period, but they would need to provide evidence that the death was intentional.

Since it's impossible to ask the policyholder their intent, and both the insurance company and beneficiary may have supporting evidence, accidental death may not always be covered.

Death from an illegal drug overdose during the contestability period will generally be denied. Even if the death is not considered suicide, the contestability clause can cover death during illegal acts. Once the period of contestability and the suicide clause have ended, whether a claim is paid depends on whether all related information was disclosed in the application — such as attending a drug treatment program. Payment also depends on whether the policy has additional clauses, such as exclusions for dangerous or illegal activity.

Alcohol-related deaths are similar. If the insured person failed to disclose anything about their mental health, a history of alcohol abuse or treatment, or information about their drinking behavior, their beneficiary may not receive a payout. And if the insurance company were able to find evidence, such as testimony of witnesses, that the policyholder intentionally tried to kill themselves, the company would be able to reject the claim during the waiting period.

How to prevent a life insurance claim from being denied for suicide

All individual life insurance policies come with some sort of waiting period after coverage has been purchased. "No waiting period" policies generally refer to ones that don't require medical exam or test results to come in before coverage goes into effect.

If you're shopping for life insurance the best thing to do to make sure any future claim isn't denied is to disclose all relevant information when purchasing your life insurance policy. It may be difficult, and you may be worried your application will be rejected, but providing false information can easily cause your family's claim to be denied.

Whether you've had suicidal thoughts, previously attempted to commit suicide or have a history of mental illness, some companies will cover the risk. It may require applying with multiple life insurance companies. There are just a few issues, such as multiple suicide attempts, that will prevent you from finding coverage with at least one company.

When you apply for a life insurance policy, you should have records of and be up front about:

  • Any history of drug or alcohol use, abuse or treatment
  • All medications you've taken or are currently taking
  • Any diagnosis or treatment for a mental health condition, such as depression
  • Participation in any risky activities, such as skydiving

Depending on the information provided, your life insurance company may limit the size of your death benefit, offer higher rates or add exclusions to the policy. But failing to disclose any of these details may mean paying thousands of dollars in premiums, just to have your beneficiary not receive payment.

In addition to disclosing all relevant information, you should give your beneficiary a copy of your life insurance policy and get them familiar with the terms. It's common for a beneficiary to be required to provide a death certificate and cause of death. This will help them make a claim and provide the details the company requests.

Contesting a life insurance claim denial

An insurance company may contest a claim if they believe the policyholder died from suicide during the contestability period or suicide clause waiting period. The company will typically defer to law enforcement or the medical examiner's ruling. But in some cases, they may launch their own investigation and consider:

  • The death certificate
  • An autopsy report
  • Hospital reports
  • Testimony from friends, family or witnesses
  • The insured person's medical and mental health history, including records of psychiatric care and medications
  • Any evidence of drug or alcohol abuse or illegal behavior
  • Weapons purchases
  • Anything that could be considered a suicide note

The burden of proof of suicide lies with the company, but they can deny payment. If they do, the beneficiary may have to contest the denial to receive a death benefit. If the claim is denied by the insurance company, and the beneficiary believes the reason is incorrect, the beneficiary may need to bring legal action to receive a payout. Some situations are debatable, such as an overdose from prescribed medication, but the beneficiary is more likely to receive a settlement by contesting the company's decision.

State laws for suicide and life insurance

If you disagree with an insurance company's decision to deny a claim due to suicide, you may want to consult your state's laws. Many states have protections in place. In Texas, for example, a policy's contestability period can only extend for up to two years, and companies are restricted in applying new suicide clauses to converted policies. In California, you typically have two to four years to sue to contest a contract.

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