Does life insurance cover suicide? Life insurance payouts for suicide are possible, but there can be exceptions. Let's discuss how life insurance companies treat suicide when processing claims for policyholders who take their own lives.
Suicide is a sad and very real issue. Depression is the leading cause of suicide. Someone takes their own life in the US about every twelve minutes. Those suffering from depression should always disclose their condition when applying for life insurance.
Otherwise, the life insurance provider could deny life insurance payouts for beneficiaries when the policyholders pass.
Life Insurance Suicide Clauses
Mental health is so important to our everyday well being. Unfortunately, many people struggle with mental health issues like depression. Some people suffer in silence for years and take their own lives suddenly and unexpectedly. This is devastating for families.
When policyholders commit suicide, life insurance companies can deny payment to beneficiaries. However, the good news is most life insurance policies will payout for suicidal deaths. The key determining factor is that death from suicide can't occur within the first two years a policy is opened.
A two-year life insurance suicide clause is pretty common in most life insurance policies. There is also a two-year period following the date a life insurance policy is created known as the contestability period. Note, the contestability period and a life insurance clause aren't the exact same thing. I'll explain further down below.
The reason life insurance suicide clauses and contestability periods exist is to avoid fraud. For example, providers utilize a suicide clause to avoid policyholders purchasing life insurance for the sole purpose of taking their own life in order to give their family a death benefit payout.
Unless a life insurance policy has an additional provision or exclusion, you can rest assured that you can get a life insurance payout if your loved one committed suicide two years or more from the date the policy was opened.
Physician-Assisted Suicide
What if you or a loved one become terminally ill? Some people choose to end their life by physician-assisted suicide instead of suffering through difficult medical treatments or a diminished quality of life. This process is also referred to as the right to die or death with dignity.
It's only legal in these five states at the time of writing:
- California
- Colorado
- Oregon
- Vermont
- Washington
Life insurance payouts for suicide aided by a physician are covered if the death occurs after the two-year contestability period. This is comforting to know if you have a life insurance policy.
If you become terminally ill down the road, your family can still be protected while you die in dignity – just make sure it's been more than two years since you got your life insurance policy.
Depression
Depression is a real illness. It's a disorder of the brain and also a state of mind. Tens of millions of people in the US are afflicted with depression. It's the most prevalent mental illness. Here are some interesting facts:
- 99% of mind-brain illness is from depression. The other 1% is comprised of schizophrenia and other psychotic illnesses.
- 1 in 10 Americans suffers from depression; over 18 million adults.
- Depression is the leading cause of suicide.
- It is the leading cause of disability for ages 15-44.
Part of the life insurance application process requires prospective clients to disclose if they suffer from depression. Lying or withholding information about mental health when applying for life insurance may seem tempting, but don't do it. Doing so could void the policy and leave your beneficiaries empty-handed.
The good news is it's possible to get competitive rates for life insurance even if you have depression. The life insurance provider will want to know:
- When you were first diagnosed
- The severity of depression
- If you are actively seeking treatment
- Any medications you're taking
- If you are attending therapy sessions
Drug Overdose
Things can get a bit complicated if the cause of a policyholder's death is due to a drug overdose. A lot depends on whether the death is determined to have been accidental or intentional.
There are several other reasons why life insurance may or may not payout for drug overdose. The legal definition of accidental death varies from state to state. Plus, life insurance providers often treat deaths from drug overdose differently depending on if the drug was prescribed, illegal, or from alcohol.
Some of the factors used to determine if the cause of death was accidental and not suicide are below.
- The drug was taken accidentally
- Too much of the drug was taken inadvertently
- The wrong drug was given/taken
- Administration of the drug was done in error or accidentally during surgery or a medical procedure
- Evidence suggests the person didn't intend to die from consuming alcohol
Many life insurance policies have specific clauses surrounding drug overdose. For example, typically if a policyholder is driving and dies in a car accident while being intoxicated, death benefits are denied.
Death by an overdose of illegal drugs is also often denied as are deaths due to overdose from drugs not prescribed to the decedent, or when taking them against prescribed orders.
So you can see how things can get complicated with life insurance payouts and drug overdose. When in doubt, read the life insurance policy in detail, ask a life insurance agent for clarification, or seek the counsel of an attorney if you feel a death benefit payout was wrongfully denied to you as a beneficiary.
Does Life Insurance Cover Suicide?
If the cause of death is determined to be suicide and occurs after the first two years a life insurance policy is activated, life insurance payouts for suicide are usually covered. You can always check the details of the suicide clause language in your policy for its exact terms.
We now know that the life insurance suicide clause and contestability period are both typically for the first two years a policy is opened. However, even though the time periods overlap most of the time, keep in mind the contestability period could be reset if a life insurance policy lapses and has to be reinstated by the policyholder.
The main differences between the life insurance suicide clause and the contestability period are their purposes: the suicide clause is concerned with avoiding self-harm and the contestability period is there to prevent fraud.
The life insurance provider also needs to have cause and evidence of fraud to deny death benefits during the contestability period. Autopsies and investigations are typically used. It's also ultimately up to the insurance provider to prove the cause of death was suicide.
Hopefully, you won't ever lose a loved one to suicidal death. The loss of any loved one is a devastating experience. And it takes time to grieve and heal.
Here are some helpful life insurance resources you should find useful:
Get Free Life Insurance Quotes
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I didn’t realize that part of the application and underwriting process for life insurance involves screening for depression. It makes sense to me now though, especially after reading the stats above about the correlation between depression and suicide. I can’t imagine how hard it must be to lose a loved one to suicide. I’m glad that life insurance covers suicide in most cases assuming the two year period is passed. Those beneficiaries sure need it the most because losing someone to suicide isn’t something anyone expects or prepares for. Thanks or the helpful info.