Does Life Insurance Cover Suicide In America?

Losing a loved one is devastating—whether they chose to take their own life or not.  Financial concerns are just one aspect of the grieving process, especially if the person you lost was a primary provider for your family.

You likely have a whirlwind of questions, and one of them may be whether life insurance covers a suicide death. The answer is both yes and no, depending on how many years the policy has been in place and the circumstances surrounding the death of your loved one.

We put together this guide covering everything you need to know about life insurance and suicide.

Does Life Insurance Cover Suicide?

Yes life insurance does cover suicide; however; your policy will need to be in-force for over 2 years. If the policy is less than two to three years old, the insurance company will typically contest the death with the goal to not pay the claim if the type of death wasn't covered.

However, by law, the company must pay the death benefit after the waiting period has passed. The waiting period is specified in the life insurance policy’s suicide clause.

What is a Life Insurance Suicide Clause?

In life insurance suicide clauses, the insurance company will not pay a death benefit for a certain amount of time—usually two years—after the policy is purchased. Life insurance companies enforce this clause to prevent the insured person from getting a policy and shortly afterward committing suicide to get a payout for their loved ones.

How Individual Life Insurance Handles Suicide

If the insured person commits suicide following the two-year period of the suicide clause, the insurance company will almost always pay the claim to the beneficiary.

That means, in the majority of cases, yes, life insurance covers suicide. Even if the company denies the claim, you may still receive all or a portion of the premiums that were paid.

You also have to option to contest a denial. Your options in that regard depend on the state the suicide occurred in. A lawyer familiar with insurance law is recommended in this case.

Life Insurance and Physician-Assisted Suicide

Physician-assisted suicide occurs when an individual with a terminal illness—usually those with six months or less to live—chooses to die with the assistance of lethal medications administered by a licensed physician.

Advocates in the medical community also call this practice ‘physician-assisted death’ or ‘aid-in-dying’ due to the controversy over the term. Only a few states (and the District of Columbia) have passed so-called ‘death with dignity’ laws that allow for physician-assisted death:

• California
• Colorado
• Hawaii
• Maine
• New Jersey
• Oregon
• Vermont
• Washington 

Most death-with-dignity laws state that patients choosing physician-assisted death are not engaging in suicide but facilitating their eventual death through legal drugs as recognized by the state.

Their legal cause of death is their terminal illness. It’s important to recognize this difference, as it allows patients to qualify for life insurance benefits. If the patient is not legally committing suicide, the insurance company cannot apply the suicide clause. Therefore, the life insurance company must follow through with the death benefit. However, that stipulation only holds if the individual falls terminally ill after purchasing the insurance.

If a patient is already terminally ill and seeking to purchase insurance for the first time, the insurer may request a medical exam and potentially deny them coverage on the basis of a pre-existing condition.

How Group Life Insurance Treats Suicide

Many companies cover employees’ life insurance through a policy known as group life insurance. In the case of group life insurance policies, the suicide clause rarely applies, and the beneficiary will receive a death benefit. It's essential to have a copy of the life insurance policy.

However, you may also file a claim with the insurance company directly or contact the employer’s human resources department with questions about filing a claim.

When Can Life Insurance Companies Not Pay Out?

Apart from suicide, life insurance companies can refuse to pay for other factors during the contestability period.

Similar to the suicide clause, the contestability period is a set period—usually two years—during which time the insurance company can contest your claim as a way of denying the death benefit.

An insurance company may contest your claim if they believe they’ve been deceived. That deception may include:

• Fraudulent statements when applying for insurance
• Failing to disclose necessary information when applying for insurance

A deception-based denial can also include cases of accidental suicide as the result of drug or alcohol use if the insured failed to disclose a history of substance abuse or the use of prescription medications when they applied for the policy.

However, after the two-year period, the incontestability clause kicks in, and the company can no longer contest the claim as a way to deny payment—the insurer must pay the death benefit.

Beyond the contestability period, insurance companies may not issue payment for other reasons, including:

• The life insurance company cannot contact the policy’s beneficiary
• Beneficiaries are unaware that they are entitled to a life insurance payment
• The insurer has no knowledge of the policy holder’s death

Taking Action

If you or someone you know is struggling with suicidal thoughts, or you are struggling to cope with the loss of a loved one to suicide, know that there are additional resources out there to help.

The National Suicide Prevention Lifeline offers free service online and over the phone at 1-800-273-8255. They’re available to take your calls 24/7. They also provide loss survivors resources.

If you need life insurance, you can get immediate quotes and coverage by clicking here or on any of the above buttons.