Does Life Insurance Pay for Suicidal Death?

The death of a loved one is always difficult for the surviving family members to deal with. It can be especially hard when the person’s death comes suddenly or violently, or when it’s the result of suicide. People left behind by a loved one’s suicide can struggle emotionally for years afterward, and they may also be left with a more immediate financial struggle in the wake of their loss. If the person who died was the primary provider for the family, their beneficiaries may have an immediate need for the relief an insurance policy provides.

Does Life Insurance Pay for Suicidal Death?

Under some circumstances, a life insurance policy might pay out for a death that’s ruled a suicide. For the obvious reasons, insurance companies are generally skeptical of claims for self-caused deaths, but many life insurance policies include coverage for suicides after an initial exclusion period runs out. A life insurance policy excludes suicide coverage for a period of 1 to 2 years after the policy is first issued. This helps avoid cases of people taking out large policies shortly before taking their own lives. Depending on the details of a company’s coverage, the exclusion period might reset whenever there’s a change to the plan, such as a coverage increase or new beneficiary added.

What Types of Death Are Typically Covered by Insurance?

Most life insurance policies cover accidental deaths and those caused by illness. In cases where the cause of death is clear and there’s no special cause for suspicion, most life insurance policies pay out with minimal complications. If a loved one dies after several years of fighting cancer, for instance, their insurance company might only require a valid death certificate that states the reason the person passed away. If anything about the person’s death is unclear, you might be contacted for more information, which could be a simple statement from your loved one’s doctor or the report of the medical examiner or funeral home director.

Accidental death frequently occurs suddenly, it is often unexpected and the person who dies can be of any age. Because many suicides are staged to appear accidental, insurance companies often ask for extra information before approving a policy claim. If you have lost a loved one to an automobile collision, for example, you may be asked to provide the life insurance company with a police report in addition to the other certification documents. Almost all police agencies provide these reports for a small administrative fee. If the accident did not generate a police report, such as a fall from a ladder or slip and fall in the bathroom, the county medical examiner’s opinion that the death was accidental is usually enough to satisfy the requirements of a life insurance carrier.

What Types of Death Are Not Typically Covered by Insurance?

Death from other causes, sometimes referred to as unnatural deaths, are not always covered by insurance providers. Whether or not a death will be covered often depends on the specific details of the case. If an insured person’s death is ruled a homicide, for instance, most insurance companies insist on receiving the police report before they can authorize payment on the person’s life insurance policy. This practice helps to exclude payments to people who are responsible for the death, and who might be listed as plan beneficiaries. 

Suicidal death is also often subject to heightened scrutiny by most life insurance providers. Assuming homicide is ruled out, and that the death genuinely is self-inflicted, whether or not the policy pays out can come down to the specific terms of the coverage, length of time the plan has been in effect and whether the insurance company reasonably suspects fraud or other misconduct aimed at extracting a policy settlement. It may be the case, for example, that a person who was already planning suicide took out a large policy and waited until the exclusion term expired before taking their own life. If evidence of this surfaces during the claim process, your insurance company might resist payment and eventually offer only a limited settlement to avoid legal action. In cases such as this, you might have to hire a lawyer to represent you in your claim against the insurance company.

Exceptions for Suicidal Death

Suicide, while always tragic, is not always cause to delay a life insurance payout. If, for instance, your loved one held a life insurance policy for many years before developing a fatal illness, and there’s reason to believe their suicide was a result of that illness, then the insurance company may honor your claim request without significant resistance.

Death Benefits Versus Cash Value

The amount of money you are entitled to collect from a policy claim relating to suicidal death may be different from what you would get after a natural or accidental death. Almost all life insurance policies draw a distinction between their listed death benefit and the cash value of the whole policy.

Briefly, a plan’s cash value is equal to the total amount of premiums paid into the policy minus the cost of insurance. In cases where a death is from natural or accidental causes, many policies simply pay out the cash value.

For some suicides, only the death benefit will be honored, with the rest of the cash value being forfeited to the insurance company. How this works varies with the type of insurance plan being claimed.

Group Life Insurance

People commonly get group life insurance through an employer, and most policies do not include suicide clauses. If the covered person in a group policy commits suicide, their beneficiary may only get the death benefit, losing the remaining cash value.