I’ve often been told that life insurance has an out with people with severe depression or severe bipolar disorder because they’ve got that suicide clause thing. I’ve written about this before and I think life insurance companies would probably prefer I leave it alone, but it’s a subject that needs clarification.
In virtually every traditional life insurance policy in our country there is a two year suicide clause. Simply put, for the first two years of the policy the company does not have to pay a death benefit it death is due to suicide.
The language from one of my own policies states, “The benefits payable are limited if the insured commits suicide, while sane or insane, within two years from the issue date. In such case, out liability will be limited to a refund of the premiums paid to us”.
This is important. I was reading the other day about a dramatic increase in suicide rates during the great depression and an already increasing rate around the world because of our current recession. I am certainly not advocating suicide, but the family left behind needs to know that just because it was suicide doesn’t mean they won’t get the life insurance due to them.
I suspect whether due to ignorance about the suicide clause and what it really says, or out of a misplaced sense of shame, plenty of legitimate claims are never filed. The company isn’t going to track you down. In fact from their end it will probably just appear as though a policy lapsed. Even if the policy lapses, if it was in force at the time of death it is a legitimate claim.
The suicide clause lasts for two years because that’s the law. Regulators didn’t want to see a situation where someone had paid into a policy for a long time, or even more than two years, and had a catastrophic life event that ended in suicide and leave the family penniless.
Bottom line. I hope this helps even one person to file a legitimate claim that would have otherwise gone unpaid.
My 20 years of experience give me the knowledge and leverage to find reasonably-priced life insurance for people who have been declined or are paying more than they need to.
So, are you saying that if someone commits suicide within the two year contestibility period, some life insurances would pay if taken to court?
Probably not the first time I didn’t make myself clear. What I was trying to say is that a lot of claims are not filed after the two year clause (one year in some states) because people don’t understand that there is a clause and therefore assume that insurance doesn’t cover suicide. Sorry if I confused that point.
I have a question regarding this two year clause. I started a new job in May of 2010 after 90 days I was eligible for the insurances. I applied for the life insurance for myself, my husband and our 16 year old son. On January 11th of 2011 our son committed suicide. They told me the policy was void because of the two year clause. The policy was for nothing more than enough to pay for his funeral expences. Does the two year suicide clause apply to children as well? This just seems wrong to me. I almost didn’t take out the policy on him because it seemed morbid,but I wanted to have one less thing to worry about if God forbide something ever happened. Suicide never crossed my mind.
I am so sorry for your loss. I wish I could tell you differently, but the two year suicide clause, if included in the policy, means the company does not have an obligation to pay the death benefit. The suicide clause applies to everyone, including children. My prayers are with you and your family that some day you will heal and be at peace. Sincerely, Ed
Thank you for giving some peace and mind to those that need it, and clarifying for those that prefer to be informed. Your kindness and understanding is greatly appreciated.
What about after the 2 yrs
Shelia,
Suicide is covered after two years. This is why, in the tragedy and aftermath of suicide I always encourage the filing of a claim. I really believe a lot of claims are never filed because beneficiaries don’t believe they’ll be paid.