Suicide and Life Insurance – What Is Covered?

It is a real tragedy when someone commits suicide. We feel sorry for the victim and it is devastating for the whole family and friends. If that person had a life insurance policy, his or her beneficiaries will wonder if they are entitled to the benefit. I will do my best to answer that question as detailed as I can.Contestability clause. Life insurance policies have a contestability clause which, usually, is 2 years (for policies that do not need a medical examination, it can be longer). During the period, the agency is not entitled to pay the benefit if the insured dies in any other way except from an accident. If the insured commits suicide within this two year period, the insurance company won’t have to pay out the benefit. In some cases, a policy will have a contestability clause that deals with suicide cases. Some jurisdictions ask this to be shorter, so it usually last for one year. This suicide exclusion clause is meant to prevent people from committing insurance fraud. Although it sounds grim, some people could spend a fortune on a huge policy and suicide the next day to save their family from poverty. Is suicide always covered? Since insurance laws are not federal, but state regulated, some states may allow insurance agencies not to cover suicides. Some agencies may have specific suicide exclusion, if for example you have a history of depression. Whether suicide is covered or not depends a lot on what the policy says and on the state laws. There are 36 states that require agencies to cover suicide after the two-year contestability period.Get help from a professional! An insurance agent can help you a lot more than I can. He or she can read your policy and decide if you are entitled to get the benefit or not. Other details are also important, so make sure you give all the required information.A lawyer is sometimes needed too, especially if the agency refuses to pay the coverage. An experienced attorney knows the state laws and can tell you if you have a case. Remember that it is important to protect your rates and the deceased wishes so do not be afraid to take legal action against the company!In conclusion, most insurance agencies suicide is covered after the two years contestability period, but there are states where agencies are allowed to exclude death by suicide from being covered!

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