Does Life Insurance Pay for Suicidal Death?
Suicidal death is usually covered by life insurance policies if the policy was purchased at least two to three years before the insured died. There are a few exceptions because the suicide clause and contestability clause in a life insurance policy expire after this waiting period. However, if you failed to disclose information at the time you purchased the policy, such as risky behaviors or a depression diagnosis, your beneficiary's claim may still be denied.
When does life insurance cover suicide?
Suicide is generally covered by individual life insurance policies if it occurs after the policy's suicide clause and contestability provision have expired. Your life insurance policy will typically cover suicidal death once both of these exclusions are no longer in effect, which is usually two to three years after the policy was purchased.
- Contestability clause: This typically lasts two years, during which time the insurer can contest or deny a claim for a variety of reasons. If the insurer believes you committed suicide during this time, it will investigate the circumstances of your death and may deny your beneficiary's claim. When the contestability period expires, the incontestability clause takes effect, and a claim cannot be contested unless there is a serious mistake or fraud in your application. Minor errors will not result in a claim being rejected.
- Suicide clause: Generally two or three years in length, this clause allows insurers to investigate claims and deny coverage if you intentionally cause your own death. If the insurer can prove that you deliberately killed yourself or that your death was ruled a suicide, your policy will be voided and your beneficiary's claim will be denied.
While these provisions are similar, the contestability provision is broader because it addresses other events that can cause a claim to be denied during the waiting period, such as dying while participating in an illegal act. To protect themselves financially, life insurers include contestability provisions and suicide clauses in their policies.
The contestability clause allows insurers to void coverage in certain circumstances, such as if incorrect information was provided on the life insurance application. The suicide clause, on the other hand, protects insurers from having to pay claims if the policyholder intended to commit suicide and leave money to their beneficiaries.
If you switch life insurance policies, even if they are with the same insurer, your contestability period and suicide clause will be reinstated. So there would be another waiting period during which your life insurance would be void if you committed suicide. However, if you simply convert your life insurance policy, this is not usually the case.
For example, if you converted a term life insurance policy to a whole life insurance policy with the same death benefit, you would not enter a new contestability period. However, if you had two term life insurance policies and decided to combine them into a single policy with a higher face value, the suicide and incontestability clauses would be reinstated.
If you die during the contestability period and it is determined that you committed suicide, your beneficiaries will not receive the death benefit of the policy, but they may receive the sum of premiums paid. If you had a cash value life insurance policy and borrowed money from it, the amount of the loan would be deducted from the payout your family would receive.
Does group life insurance cover suicide?
Suicide is covered differently under group life insurance, such as that provided by an employer or organization, than it is under individual life insurance. If your employer fully pays for your group life insurance, it will generally cover suicide with no restrictions for the first two years. However, if you purchased supplemental life insurance through your employer, it will almost certainly include a suicide or contestability clause.
Does military life insurance cover suicidal death?
Members of the military and veterans who qualify for Veterans Affairs life insurance are generally covered in cases of suicide. Policies for military life insurance Because there is no contestability period or suicide clause, VGLI and SGLI cover suicide.
Questionable life insurance situations
Most life insurance policies cover "natural death," which can include accidental death, suicide, health problems, and a variety of other natural causes, as long as none of the policy's exclusions are met. The difficulty for beneficiaries is that there are some cases where it is unclear whether a death was caused by suicide. In that case, the death could be challenged during the waiting period for the suicide clause. There may also be issues if another exclusion in the contract, such as the dangerous activity or illegal activity exclusions, was triggered.
Does life insurance cover 'death with dignity'?
Your life insurance policy should cover doctor-assisted suicide, also known as "death with dignity," as long as the contestability and suicide clauses have expired. However, you should check your policy document to ensure that there are no other exclusions that would void your policy.
An illegal activity clause, for example, could prevent your beneficiaries from receiving the death benefit if you died from doctor-assisted suicide in a way that violated regulations. Only seven states, plus Washington, D.C., allow for death with dignity in certain circumstances:
- California
- Colorado
- District of Columbia
- Hawaii
- Oregon
- Vermont
- Washington
- Montana
Does life insurance cover drug overdose or alcohol?
Life insurance may cover death from a drug overdose or an alcohol-related death, depending on the circumstances of the event and the exclusions in your policy.
An accidental overdose, such as taking too much of a prescribed medication, is usually covered if your medications and the reasons for taking them were disclosed when you purchased life insurance. The insurer may contest a claim if it occurs during the contestability period or the waiting period for the suicide clause, but the insurer must provide evidence that your death was intentional.
Accidental death may not always be covered by life insurance because it is impossible to ask the insured about their intent and both the insurer and beneficiaries may have evidence supporting their case.
Generally, death from an illegal drug overdose during the contestability period will be denied. Even if it is not considered suicide, the contestability clause may cover death as a result of illegal acts. Once the contestability period and the suicide clause have expired, whether a claim is paid is determined by whether you disclosed all relevant information in your application, such as attendance at a drug treatment program. Payment is also contingent on whether your policy includes exclusions for dangerous or illegal activities.
Deaths caused by alcohol are similar. Your family may not receive a payout if you failed to disclose anything about your mental health, a history of alcohol abuse or treatment, or information about your drinking behavior. Furthermore, if the insurer was able to find evidence, such as witness testimony, that you had intentionally attempted suicide, they would be able to reject the claim during the waiting period.
How to prevent a denied life insurance claim after suicide
After you purchase coverage, all individual life insurance policies include a waiting period. "No waiting period" policies are those that do not require you to wait for medical exams or test results before coverage begins.
The best way to avoid a claim denial is to disclose all relevant information when purchasing your life insurance policy. It may be difficult to do so, and you may be concerned about having your application rejected, but providing false information can easily lead to the rejection of your family's claim.
Whether you've had suicidal thoughts, attempted suicide before, or have a history of mental illness, some insurers will generally cover your risk. While you may need to apply with multiple life insurance companies, there are only a few issues that will prevent you from finding coverage with at least one insurer, such as multiple suicide attempts.
When applying for a life insurance policy, you should have records of and be open about the following:
- Any history of drug or alcohol use, abuse or treatment
- All medications you've taken or are currently taking
- Any diagnosis or treatment for mental health conditions, such as depression
- Participation in any risky activities, such as skydiving
Your life insurance company may limit the size of your death benefit, offer higher rates, or add exclusions to the policy based on the information provided. However, failing to disclose any of these details could result in you paying thousands of dollars in premiums only to have your beneficiary fail to receive payment after your death.
In addition to disclosing all relevant information, you should provide a copy of your life insurance policy to your beneficiaries and familiarize them with the terms. A death certificate and information on the cause of death are frequently required of a beneficiary. This will assist your beneficiaries in filing a claim and providing the information required to resolve any issues with the insurer.
Contesting a life insurance claim denial
If an insurer believes the insured committed suicide during the contestability period or the suicide clause waiting period, it may contest the claim. In most cases, the insurer will defer to law enforcement or the medical examiner's decision, but in some cases, it may conduct its own investigation. In these cases, the life insurance company may take into account:
- The death certificate
- An autopsy report
- Medical reports
- Friends, family, or witnesses may testify.
- The insured's medical and mental health history, including psychiatric treatment and medication records
- Evidence of drug or alcohol abuse or illegal behavior
- Purchases of weapons
- Anything that could be interpreted as a suicide note
While the insurer bears the burden of proving that the insured died as a result of suicide, the company can deny payment, and beneficiaries may have to contest the claim denial in order to receive a death benefit. If your claim is denied by the insurer and you believe the reason is incorrect, you may need to file a lawsuit in order to be compensated. Some situations are debatable, such as an overdose from prescribed medication, but contesting the life insurance company's decision increases your chances of receiving a settlement.
State laws for suicide and life insurance
If you disagree with an insurer's decision to deny a claim due to suicide, you should check your state's laws, as many states have beneficiary protections in place. In Texas, for example, a policy's contestability period is limited to two years, and insurers are limited in their ability to add new suicide clauses to converted policies. You typically have two to four years in California to sue to contest a contract. In Texas, a life insurance policy's contestability period is limited to two years.