Suicide is the act in which someone causes their own death by self-inflicted injury. In 2019, suicide was the 10th leading cause of death in the United States, so it should not be a surprise that 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 under considerable financial strain.
In this article, our lawyers explain what happens with the life insurance benefit when the policyholder takes their own life 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?
Typically, life insurance will cover suicidal deaths if the insured died after at least two years since purchasing the policy. Before this, there are two specific measures in place that allow companies to deny the beneficiary’s claim.
- Suicide Clause. To prevent people from having a financial incentive to take their own life shortly after buying life insurance, most companies add a suicide clause to the policy, also known as suicide provision or suicide exclusion. According to this clause, life insurance companies will not pay out if the insured died by suicide within the first two years after the policy became active. However, once the exclusion is no longer in effect, the policy beneficiaries can collect the death benefit if the individual committed suicide.
- 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 payment due to a variety of reasons regardless of the cause of death. Once the contestability period expires, the incontestability clause goes into effect. That means that the insurer cannot contest the claim based on suicidal death unless there is evidence of serious material misrepresentation or fraud.
While these 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.
Also, note that if the insured made changes to his 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 beneficiary rights.
Group Life Insurance and Suicidal Deaths
Typically, group life insurance policies do not include a suicide clause. If the insured killed themselves shortly after signing up for a group plan entirely sponsored by their employer or an organization, beneficiaries should be able to collect the death benefit. On the other hand, if they only purchased supplemental life insurance from an employer, there will 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.
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 a suicide. Their beneficiaries will be able to collect the policy’s death benefit.
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:
- District of Columbia
- New Jersey
- New Mexico
- 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.
What to Do If Your Life Insurance Claim Is Denied for Suicidal Death?
Usually, life insurers use the death certificate to determine whether someone died by suicide. However, if the cause of death is inconclusive or may be due to other uninsurable causes, insurers may contest the claim if death occurred during the contestability period or the suicide clause waiting period. They will launch their own investigation by 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 some time, therefore, beneficiaries might experience a delay in receiving the life insurance policy payout. On the other hand, if the investigation rules death by suicide, life insurer will deny the proceeds altogether.
If your claim is denied and you disagree with the investigation’s findings, you are entitled to contest the decision. Some death scenarios leave room for debate over insurable and uninsurable causes of death and insurance companies are extremely adept in leveraging this confusion to avoid paying out the policy proceeds. This is why you should seek legal counsel.
At our law firm, our life insurance attorneys have years of experience in handling cases involving claims denied due to suicide. We will review your case, help you understand your rights, and draft a comprehensive legal brief to appeal the life insurance claim denial. We know how to navigate these murky circumstances and get you the result you deserve.
We work on a contingency fee basis which means that we will not get paid unless we recover your life insurance policy proceeds. Only then we will charge a reasonable legal fee.
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.
If you find yourself in a similar situation, call us at (888) 510-2212 for a free case evaluation.