Does Life Insurance Cover Suicide?
Life insurance typically will not cover suicide if the death occurs within the first two years of the policy. In those circumstances, the insurance company may just refund the premiums you have paid. A suicide may still be covered by life insurance if it is more than two years into the policy.
Suicide Prevention Resources
If you or someone you know is struggling with suicidal thoughts, please call the National Suicide Prevention Hotline at 1-800-273-8255. This hotline is active and available 24 hours a day.
If you feel more comfortable over text, you can also text HOME to 741741 to speak with a crisis counselor.
Does Suicidal Death Void Life Insurance?
A death by suicide will void life insurance in some cases and depending on the policy. Typically, if the death occurs within the first two years of the policy, then the insurance company will not pay out life insurance.
The reasoning for this is to prevent people who are planning to take their own lives from taking out a life insurance policy for their families when they do so.
But if suicide occurs more than two years after the policy began, the insurance company will typically pay it out to the beneficiary. This circumstance does depend on the specific contract.
According to Forbes, if a suicidal death does occur in the first two years, the company may still refund any paid premiums.
Individual Policies vs. Group Policies
In an individual policy, the two-year period typically applies.
As far as group policies, it depends on the terms of the contract.
Group life insurance has one contract for the entire group and a smaller death benefit, so an insurance company could pay out the benefit if someone in the group died from suicide.
Life Insurance Suicide Clauses
Some policies include a suicide provision. In these cases, the insurance company does not have to pay the family if the death resulted from suicide.
Since some suicide clauses cover the first two years of the policy, the life insurance company could pay the family after that time.
There is also an incontestability clause in some policies. This means that an insurance company can’t contest a claim or a payout after a certain amount of time has passed.
Some additional scenarios may affect whether a death benefit is paid out or not in the event of a death by suicide or other unusual circumstances.
Some states now have death with dignity or physician-assisted suicide, where a doctor can assist a suicide for someone whose quality of life has reached a low point due to a terminal illness.
Since there are so few states and areas where this rule exists, it depends on whether an insurance company will pay out in this circumstance.
It is unlikely that your family will receive a death benefit if you were aware of your terminal illness when you bought life insurance.
Military Life Insurance
Military group life insurance should still pay out a death benefit even in the event of suicide due to the contract covering the entire group.
Drug & Alcohol Overdose
This scenario depends on the policy and circumstance. Some policies will not pay out if the death occurred during an illegal activity, which certain drug usage could be categorized.
Also, an overdose could impact the policy if the death occurs in the first two years and there was evidence it was a suicide.
When Can Life Insurance Companies Not Pay Out?
The primary way that an insurance company cannot pay out a death benefit is if the death was by suicide and occurred in the first two years of the policy. This is true for most policies and suicide clauses.
In this circumstance, the family may receive some money from refunds on the premiums paid.
4 Cited Research Articles
- Araujo, M. (2021, May 9). Does Life Insurance Cover Suicide? Retrieved from https://www.thebalance.com/does-a-life-insurance-policy-cover-suicide-2645609
- Montana Law Review. (2020). A Right to Die, A Right to Insurance Payouts? Retrieved from https://scholarship.law.umt.edu/cgi/viewcontent.cgi?article=2466&context=mlr
- National Library of Medicine (2004). Life insurance, living benefits and physician-assisted death. Retrieved from https://pubmed.ncbi.nlm.nih.gov/15378591/
- U.S. Military Installation Management Command. (n.d.). Denial of Payment from SGLI. Retrieved from https://home.army.mil/monterey/application/files/7815/8983/9205/Denial_of_Payment_from_SGLI.pdf