Many people mistakenly believe that if a person commits suicide, their life insurance won’t offer a payout. This isn’t necessarily true. There are occasions when a death benefit will be paid, but you need to understand the policy and its terms.
Possible Issues
In most cases, the death benefit of a suicide victim is normally paid in full unless someone chooses to contest it. After approximately two years, policies are paid in full regardless of any mistakes found in the paperwork or application.
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Incorrect Age or Gender
the corrections to these errors may influence the payout
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Fraud
the policy will be voided if fraud is found within the policy
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Short-term Contestability
this comes into play when a person is thought to be mentally ill and passes away before the period end of the contestability period
The Suicide Clause
The suicide clause does not necessarily negate the policy, but it requires that it be in place for at least two years before a person’s family can file a claim. The contestability period varies from carrier to carrier. In most cases, this is approximately two years, but some insurers only require one year.
Employer-Provided Policy
Most employer-provided policies will pay out a death benefit after the two-year contestability period. Rarely do they contain any type of suicide clause that would deny a family from being able to file a claim.
Life Insurance Payouts
Suicides that occur after the contestability period will be paid in full. Most insurers, however, will return any premiums that were paid as long as the policy was kept up to date. Any premiums that were owed will be deducted from the amount being returned.
What If a Claim Is Denied?
If a death benefits claim is denied, you will have to work with your insurance company. If they are going by a law enforcement report or a coroner’s evaluation, you may not be able to contest it. They will also look at the death certificate and health history. You may challenge their findings if you feel you have information about the person’s death that may not be otherwise known. Review all of your information and discuss what you have with the insurer.
Alternative High-Risk Coverage
You do have options for alternative high-risk life insurance coverage. These policies may cost a little more, but they offer coverage for various things that are not included in other types of coverage. This type of coverage is beneficial if you have a high-risk job or participate in high-risk hobbies.
About Suicide
If you believe a friend or loved one may be contemplating suicide, don’t wait! Call the National Suicide Prevention Lifeline as soon as possible at 1-800-273-8225. There is help available!
Suicide is not something you put off dealing with. Call the agents at J. Archer Insurance Group as soon as possible to find out more information about suicide prevention, death benefit payouts, and what types of death are covered by most life insurance policies. We have the answers you need and are ready to take your call. Let us help you take control of an uncertain situation. We understand the sensitivity of your situation and will help you get things back on track. Don’t wait! Contact us today to schedule your consultation!
