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Does Life Insurance Cover Suicide Death?

When a loved one commits suicide, it’s incredibly painful for their survivors. They will have dozens of questions surrounding why the person committed suicide and if there was anything they could have done. There are also more pragmatic issues at hand, one of which may be about life insurance. Does it cover death by suicide?

Does Life Insurance Cover Suicide Death?

Suicide is complex mental health issue. Suicide is currently the tenth leading cause of death in the United States, with an estimated 1.4 million attempts each year. Survivors may wonder if the life insurance policy company will honor the policy if the owner committed suicide. 

Life insurance policies, including term life, whole life, and universal life, usually do cover suicide if the policy was purchased at least two years before the death. There are two things you have to be aware of:

  • Suicide clause
  • Contestability clause

These are similar clauses, but there is a difference.

Suicide Clause in Life Insurance Policy

The suicide clause is usually two or three years. The feeling is that this is a long enough period of time to prevent people from buying life insurance policies when they’re planning to take their own life. After this period has passed, then life insurance will pay death benefits even if the death was due to suicide.

Contestability Clause in Life Insurance Policy

The contestability clause is broader because it concerns the information you gave the insurance company when you applied for the policy. It’s important to be honest in your life insurance application, even though the temptation is to try to present yourself as healthy as possible so you qualify for lower rates. But if you do that, the insurance company can deny your claim within the first two years if they think you gave them false information. 

For example, Joe is a smoker. But when he applies for indexed universal life insurance or any other life insurance types, he doesn’t disclose this on the application, fearing they will turn him down or charge higher rates than he can afford. A year after getting the policy, Joe tragically dies of lung cancer. In this case, the insurance company would deny the claim because Joe never told them he smoked. If Joe had died after the contestability clause had expired, typically two years, the insurance company might still deny the claim because Joe misrepresented his smoking history. They could also reduce the benefit. 

Similarly, in the case of suicide, you should disclose any history of depression or mental illness when you apply for a policy. Otherwise, the company can deny the claim based on the contestability clause OR the suicide clause. Either way, your beneficiaries won’t get the death benefit. They can get the premiums returned to them, which is a lot less money. 

The suicide clause is two years (one, in some states) but the contestability clause could cause an insurance company to deny a claim if they feel they were given fraudulent information at the time the policy was enacted. 

The contestability clause allows the life insurance company to deny claims for other reasons, like:

  • Death during an illegal activity
  • Misrepresentation of information
  • Drug or alcohol overdoses

Drug and alcohol related deaths are tricky and subject to individual policy exclusions. 

>>MORE: The Pros and Cons of Variable Universal Life Insurance

Does my life insurance policy cover suicide if I get it through my employer?

Group life insurance will usually cover suicide, even if it is within the first two years of a policy. 

Does my life insurance cover suicide if I converted my policy?

If you convert a term life insurance policy to a guaranteed universal life insurance policy, the policy will not reset. This is one of the few situations where you don’t have a new contestability period. Buying a new policy, even if it is with the same company, will mean a new contestability and suicide clause. 

For example, Tom had a term life insurance policy for ten years. The policy expired and Tom decided he would purchase another ten year policy. If Tom commits suicide within the first two years of this new policy, the insurance company will deny the claim. 

Another thing people don’t realize is that if your life insurance policy lapses, and then you reinstate it, you get a new two year suicide and contestability clause. 

>>MORE: Guaranteed Universal Life Insurance for Seniors: A Good Choice?

Does life insurance cover physician-assisted suicide?

As long as your suicide and contestability clauses have expired, your life insurance company should pay the death benefit in this case. Where they can get sticky, however, is “death during an illegal activity.” Physician-assisted suicide is illegal in most states, so be sure your policy doesn’t have this clause in it. 

Does life insurance pay out in cases of homicide?

Generally, yes, but if you are the beneficiary, the insurance company will communicate with the detectives on the case to make sure you are not a suspect. If you are a suspect, the insurance company will delay paying anything until the charges are dropped or the person is acquitted. 

Last Thoughts

When comparing life insurance policies, it’s important to read the fine print. Oftentimes, the reason one company offers lower rates is because there are more exclusions from coverage. 

Life insurance companies do cover suicide if it occurs after the suicide clause has expired. They do this to prevent people from taking out large insurance policies and then committing suicide as a way of providing for loved ones. 

Read your policy carefully and remember to ask questions.

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