With suicide rates increasing in the United States, insurers take measures to protect themselves against individuals who buy policies while intending to commit suicide so that their loved ones could benefit from the life insurance payout. This means that there are circumstances when companies may refuse to pay out, leaving the family not only grieving but also under considerable financial strain.

In this article, our lawyers explain everything you need to know about life insurance coverage in the event of suicidal death and what to do if the insurer denies payment. If you find yourself in such a situation, call us at (888) 510-2212 for a free consultation.

When Does Life Insurance Cover Suicide?

Generally, life insurance covers suicide if the policy has been in effect for more than two years. If the insured dies before the two year contestability period is over, there may be certain restrictions on death benefit payments that might affect whether beneficiaries receive their proceeds. 

What Is a Life Insurance Suicide Clause?

A suicide clause, also known as suicide exclusion or suicide provision, is a period of two years from the policy’s issue date in which life insurance companies will not pay out the death benefit if the insured dies by suicide. Once the exclusion is no longer in effect, the policy beneficiaries can collect the death benefit unless other life insurance exclusions apply.

Life insurance companies add a suicide clause into their policies to prevent people from having the financial incentive to take their own life shortly after buying life insurance.

The Contestability Period

The contestability period refers to the first two years of purchasing the life insurance policy during which the insurer is entitled to investigate the cause of death and review the application documents to check the validity of the policy. During this time, the company can deny payout due to a variety of reasons regardless of the cause of death.

While the contestability and suicide clauses are similar, they should not be confused. The main difference is that the contestability clause is broader, covering more reasons for denying a life insurance claim.

If the insured made changes to their policy, such as increasing coverage or converting a term policy into a whole life policy, both the contestability period and the suicide clause may go back into effect. To make sure you understand the circumstances of your claim, you should contact the life insurance company or a lawyer to explain the policy terms and your rights as a life insurance beneficiary. Once the contestability period expires, the incontestability clause goes into effect.

What Is a Life Insurance Incontestability Clause?

The incontestability clause means that regardless of the cause of death (including suicide), the insurer can no longer contest the benefit claim based on suicidal death unless they strongly suspect that the insured committed insurance fraud or  intentional misrepresentation on the policy application. In other words, insurance companies cannot void or cancel the policy the way they had the right to during the first two years of the policy. The incontestability clause was put in place to protect insureds against companies trying to avoid life insurance policy payouts.

Does Group Life Insurance Pay For Suicidal Death?

Typically, group life insurance policies do not include a suicide clause. If the insured committed suicide shortly after signing up for a group plan entirely sponsored by their employer or an organization, beneficiaries should be able to collect the life insurance death benefit. If, however, they only purchased supplemental life insurance from an employer, there may be a two-year suicide provision. All plans are different, so it is best to contact the employer’s human resources department to get the most accurate information about your loved one’s life insurance policy.

How Does Life Insurance Payout Work for Cases Involving Suicide?

In cases involving suicide, the life insurance coverage amount beneficiaries receive depends on when the death occurred:

• Term life insurance – Beneficiaries of such policies will get the full benefits if the insured dies by suicide after the exclusion period is over. Otherwise, they will only receive an amount equal to the premium already paid into the policy. 
• Whole life insurance – Beneficiaries may receive the total cash value of the policy even if the insured dies during the suicide exclusion period, but not the death benefit of the policy. However, if the suicide happens after the clause has expired, life insurance companies will typically pay the full death benefit plus the policy’s cash value.

Military Life Insurance and Suicide

Military life insurance policies SGLI and VGLI do not include a suicide clause nor a contestability period. Members of the military and veterans who qualify for this type of insurance are covered in the unfortunate event of suicide. Their beneficiaries will be able to collect the policy’s death benefit.

Our life insurance lawyers explain more about these circumstances in our blog posts on SGLI and VGLI policies.

Does Physician-Assisted Suicide Void Life Insurance?

Physician or doctor-assisted suicide, also known as “death with dignity” or “right-to-die”, refers to a situation where a terminally ill adult chooses to take lethal doses of prescribed medication to end his life. In states that have death with dignity laws, life insurance will cover physician-assisted suicide even during the suicide provision period. Currently, there are ten states with such laws under the Death with Dignity Act:

• California 
• Colorado 
• District of Columbia 
• Hawaii
• Maine
• New Jersey 
• New Mexico 
• Oregon
• Vermont 
• Washington D.C.

In any other state, life insurance payouts for medically assisted suicide are similar to payouts for suicide: the insurer will not pay beneficiaries if the suicidal death occurred within two years from the policy issue date, but they will, once the two years have passed.

Life Insurance and Drug Overdose or Alcohol

Typically, if the insured died during the contestability period or the suicide clause waiting period, life insurance will cover accidental drug overdose, as long as the medical prescription and reasons for taking it were disclosed. However, if the company can prove that the overdose was intentional, thus, a suicide, it can deny the claim.

Death due to illegal drug overdose during the contestability period will, most likely, void life insurance if drug use or drug treatment was not disclosed on the application. Even if the death is not ruled a suicide, taking illegal drugs is an illicit act, which is one of the reasons why companies can deny paying out claims. Once the contestability period and the suicide clause have ended, whether beneficiaries receive the policy proceeds depends on whether the insurer suspects that the policyholder withheld information regarding mental illness when applying for coverage and whether the policy has additional exclusions, for example, dangerous or illegal activities. 

Alcohol-related deaths are similar. Beneficiaries may not receive the proceeds if the insurance company can prove that the insured intentionally tried to kill themselves or failed to disclose information about their alcohol addiction/treatment. 

Will a Depression Diagnosis Affect Life Insurance Payout if the Death Was Due to Suicide?

Before issuing a life insurance policy, insurers usually require policyholders to disclose medical history, including any mental conditions such as anxiety or depression. Disclosing mental illness will not disqualify people from getting life insurance coverage. The insurance company may increase life insurance premiums, but the payout will not be affected if the insured later commits suicide, provided the death does not occur within the contestability or suicide clauses.

What to Do if Your Life Insurance Claim Is Denied Due to Suicide?

Usually, life insurers use the death certificate to determine whether someone died by suicide. However, they may contest a life insurance claim if the cause of death is inconclusive or if they believe death occurred during the contestability period or the suicide clause waiting period. The insurer will typically defer to law enforcement or the medical examiner’s ruling, but in some cases, it may launch its own investigation. In these cases, they may consider reviewing additional documentation such as the autopsy report, the police report, the medical examiner report, the toxicology report, and the deceased’s medical records.

This investigation may take a long time. As a result, beneficiaries might experience a delay in receiving the life insurance policy payout. If the investigation confirms death by suicide, the life insurer may deny the proceeds. 

If your claim is denied unfairly, you may bring a legal action against the insurance company. At our law firm, we have experience handling cases involving claims denied due to suicide. We will review your case, explain your rights, and will help you appeal the life insurance claim denial.

Our life insurance attorneys work on a contingency fee basis which means that we will not charge a fee unless we win your case. Only then will we charge a reasonable legal fee. Call us at (888) 510-2212 for a free case evaluation.

Read about how our life insurance lawyers helped clients recover the death benefits:

• A client’s claim was denied due to suicide after her husband died while cleaning his gun.
• Beneficiary dispute in a murder-suicide case.