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Does Life Insurance Cover Suicide?

Preparing for Death

Death is one of the most difficult times for anyone but if that death was due to suicide, it can make the whole situation more raw and painful. When it comes to dealing with their affairs you may believe the myth that life insurance doesn't cover suicidal death.

In reality, most life insurance policies will cover suicide and the family will get that financial relief that they need. It can be more complicated than that, however, and it's important you know the right information when trying to settle finances following a death.

The suicide clause

Suicide is not something that you ever want to think about but in 2018 6,507 people committed suicide in the UK. If a person was thinking about suicide then they may be tempted to obtain a life policy to leave their family a large financial settlement once they passed away.

It's important that this temptation isn't allowed otherwise we could see an increase in suicides. If you or your family are in financial trouble then there is plenty of help available out there which can ease those financial burdens. The avoidance of an instant suicide payout is often the only block put in place.

This is often referred to as the suicide clause where the policy won't pay out for suicidal death if the policy is less than 12-24 months old. The specific time period will depend on the individual insurer. This clause is irrelevant to all other types of death covered.

Does mental illness affect my claim?

Yes, and you should be open about it. The temptation is always there to avoid the truth when filling out a policy either through embarrassment or thinking it'll get you a cheaper premium. In reality, not disclosing facts can void your insurance.

When filling out your form your level of risk will be assessed and as well as the likes of medical history and age, your history of mental illness will be taken into account too. The truth is that this may increase the cost of your premiums but it's always better to be open and honest.

Depression is seen as a pre-existing condition in the same way as any pre-existing physical illness. During the application process, an underwriter may request details from your GP to see what treatment you've had over the last 5 years.

Contestability period

In a similar way to the suicide clause, there is often a contestability period which will last for usually two years. During this time, and claims that were made during the initial application can be investigated irrespective of the cause of death. After this time, then there'll only be an investigation if there is reason to believe a part of the claim has been fraudulent.

This can affect the suicide aspect of a claim as suicide cases are often not clear cut. For example, death via a drug overdose is usually deemed a suicide. Any death during this initial period will often mean a delay in payout as an investigation will usually take place.

Why do people think life insurance doesn't cover suicide?

Ask most people and they'll probably think that life insurance won't cover suicide. It's unclear why people think this but it could be because of the scenarios where a payout wouldn't be received.

It's important to note that the most common reason for the denial of a claim is due to non-disclosure. Even if the suicidal clause period has elapsed, if the cause of death was suicide but important information wasn't given then this could invalidate the claim. As we previously mentioned, it's always the best policy to be open about your claims.

There are other policies that will exclude suicide as a reason for payout but this is rare and not the status quo for major insurance companies. Most companies will cover you even if a precious suicide has been attempted. If this is a case then a more thorough manual underwriting process would most likely take place.

If you're struggling

You may be reading this article as a loved one has passed away or possibly because you're having suicidal thoughts and want to know if your family will receive money if you take that step.

It's always important to know that there is plenty of help out there. If you have financial worries then there are numerous ways that you can get financial assistance. It could be that you have other worries and want life insurance to ease the guilt. Either way, life insurance isn't the answer as your family would always be better off with you here.

The Samaritans is a wonderful resource for help but as the link above shows, there are plenty of other ways to seek guidance both in an emergency and also for longer-term help.

Samaritans – Number: 116 123 E-mail: jo@samaritans.org

Final thoughts

For an existing life policy, life insurance will always payout for suicidal death so long as the information given during the application was accurate and it's past the suicide clause period.

If a family member has committed suicide then it's always worth a call to the insurance company, even if you're unsure whether it will be covered. Hopefully, this information has been helpful during this dark time.

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