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Does Life Insurance Pay for Suicidal Death?

Suicide and Life Insurance

Written By Doug Mitchell

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA.  Doug has spent close to 30 years in the insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health.  Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

Holly Mitchell  &

Holly Mitchell’s background in life insurance insurance goes back to 1985 when she worked for her father who was a New York Life agent. Holly has a marketing degree from Auburn University and has had a life insurance license since 2008. In addition to advising life insurance for customers all around the country, Holly is our website fact checker.

Rob Pinner   &

Rob Pinner is the founder and CEO of Pinner Financial Services servicing all 50 states. Rob started his insurance career in 2002.

Louis LaBash

Results-driven and innovative life insurance professional with 30 plus years of life insurance industry sales and marketing experience. Recognized as a pioneer in the field, leveraging phone and internet channels to exceed personal sales of over $100 million during the first decade of the 21st century. Creator of a highly effective intuitive IUL life insurance sales software that facilitated the sale of millions of dollars of indexed universal policies by numerous life insurance agents. Proven track record as a Managing General Agent (MGA), Life Agent, IUL Life Insurance Sales Software developer, and leading-edge creator of insurance marketing tools, educational content, and delivery systems.

Table of Contents

It’s a long-held belief that life insurance doesn’t pay out if the policy holder kills themselves.

But that’s a misunderstood belief and partially a myth.

This is a complex topic, but if you’re curious how the two concepts of life insurance and suicide intermingle, here’s what you need to know.

Will Life Insurance Companies Cover Suicidal Death?

Most life insurance policies will pay out if the policyholder commits suicide. But it is complex territory, suicide and insurance, which is a good thing.

If it were easy to receive a payout, it might encourage desperate people to do desperate things.

Payouts aren’t always easy to come by. Anyone who thinks they are or if anyone reading this is thinking of ending their life, I hope you’ll call the National Suicide Prevention Lifeline at 1-800-273-8255.

You may have money problems and thus think your family would be better off with your life insurance money than having you around, but you’re wrong.

Let’s discuss the circumstances that could result in both denial and approval of a life insurance policy payout.

When Do Life Insurance Companies Deny a Claim Due to Suicide?

There are two main criteria to consider:

  1. If the life insurance policyholder has only had their policy for a year or two, depending on both the insurance company and the state
  2. If it can be proven that the person committed suicide

This is for an obvious and good reason. The last thing an insurance company, or any human being wants, is for a despondent person to take out a life insurance policy on a Wednesday and end their life on a Thursday.

Example of a Claim Being Denied

And life insurance companies are very serious about making sure a policyholder hasn’t committed suicide. When actor Heath Ledger died, the ReliaStar Life Insurance Company had written the $10 million life insurance policy that was meant to protect his then two-year-old daughter, Matilda, from financial hardships. He had only taken out the policy six months earlier, however, and the insurance companies deemed the actor’s death “suspicious,” claiming that it might have been a suicide. The New York City Medical Examiner, however, thought otherwise, ruling the death an accident.

Ledger had taken prescription pills — a lot of them — but nobody — that is friends and family interviewed —  believed he intentionally wanted to kill himself. It certainly seemed improbable to the general public, since he was heading into a career-high, having just wrapped up the role of the Joker for the Batman film, The Dark Knight.

In any case, the insurance company and the lawyers working for Ledger’s estate eventually settled out of court and both sides, according to news reports, were pleased with the outcome.

But the settlement underscores that if a life insurance company believes you may have committed suicide within a year or two of buying a policy, they will do everything they can to keep your beneficiaries from collecting.

And if somebody does take out a life insurance policy and, say, eight months afterwards, they end their life? What happens? Generally, the only compensation the beneficiary will receive is that the premiums will be returned.

When Does Life Insurance Cover Suicide?

Usually, it’s after a policy has been in effect for two years. Sometimes it only takes a year; if someone has paid their premiums for a year and then decides to end things, it becomes easier to collect.

It has actually been that way for some time — and it has been debated as long.

In fact, back in 1839, John G. Millingen, a physician and author, wrote in the literary magazine Bentley’s Miscellany, “If a suicide is madness, a forfeiture of an insurance, the premium of which may have been paid regularly for a series of years, and at considerable inconvenience, is most unjust; although I can readily admit that if such an insurance was effected a short time before the act of suicide, the loss would be but fair.”

In 1898, in a trade publication called The Insurance Press, an article stated that “in the early history of life insurance, it was considered as a plain proposition that a death claim occasioned by suicide should not be paid.” The industry saw it in the same light as why you wouldn’t let a policyholder take out fire insurance — and then set a house on fire.

But even before the 20th century, it was accepted that somebody who took their own life had serious problems — and that their beneficiaries shouldn’t be denied. The Spectator Insurance Yearbook, another trade insurance publication, also in 1898, stated, “Suicide is not a valid defense against payment of loss unless it is shown that the deceased contemplated self-destruction when he took out the policy.”

Beware of the Fine Print Regarding Mental Illness and Drug Use

Which isn’t to say things will go perfectly for a grieving spouse or child if family members suddenly wonder about a policy and inquire to see if they are entitled to benefits after a loved one commits suicide. Odds are very good that you’ll be paid in full if it’s after two years, but how the policy is spelled out matters.

For instance, if the policyholder was diagnosed with mental illness before taking out the policy, there’s probably something in there about the policyholder’s coverage being denied if the holder committed suicide. There may be something in the fine print about addictions, especially if it was known that the policyholder had a drug problem. There could be a lot in the fine print that prevents a policy being paid out in case of a suicide.

Final Thoughts on Life Insurance and Suicidal Death

Of course, if you’re looking to buy life insurance and checking the fine print and worrying about what’s there and what’s not in case you would decide to someday do yourself in, that’s probably a good sign that you should talk to a professional.

Remember, life insurance is there in case the unthinkable happens. If you don’t use it, everyone wins.

Call us today for a quote from the best term life companies at 1-800-712-8519.

Picture of Doug Mitchell, CLU

Doug Mitchell, CLU

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent close to 30 years in the life insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health. Some other notable items about Doug: Top of the Table Million Dollar Round Table member (MDRT). (MDRT is a global, independent association of the world’s leading life insurance advisors) | Premier Partner with Lincoln Financial and Cabinet Member | Served two years as President of the Auburn/Opelika Association of Financial Advisors | Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award | New York Life, Executive Council Member | Currently serves as President of Ogletree Financial, a life insurance General Agency. | Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

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