In 2020, suicide ranked as one of the top nine causes of death for persons aged 10-64. Although life insurance may offer compensation for a suicide, various policies have distinctive restrictions limiting the number of benefits you can pay out.
How Does It Work
When it comes to suicide, insurance firms don’t want their customers to have any reason to end their own life. Therefore, a suicide clause or suicide provision is included in many types of life insurance.
Insurance policies often include an exclusion period of two years during which they will not pay out a death benefit if the policyholder commits suicide. Following the expiration of the exclusion period, the policy’s beneficiaries will be entitled to a payout if the insured individual commits suicide. The sort of insurance you have may also affect the suicide clauses.
The Group Life Insurance
Many group life plans, such as those individuals often get via their companies, do not include a suicide clause, in contrast to most individuals’ life insurance policies. The policyholder’s heirs are usually entitled to the death benefit if the policyholder commits suicide.
The Term Life Insurance
The exclusion period must have passed before the beneficiary may collect a death benefit from an individual’s term life insurance policy. After one or two years of paying premiums, the policy’s beneficiaries will get the entire death benefit. But if they pass away within that time, their heirs may only get the whole of the premiums paid up to that point.
The Whole Life Insurance
Even if the insured passes away within the waiting period, the policy’s cash value may still be distributed to the beneficiaries. Once the waiting time is over, the beneficiaries are entitled to the entire death benefit and monetary value.
Conclusion
Coverage for suicide by an individual is often guaranteed once the policy’s contestability period and suicide clause have ended. The life insurance coverage will often cover suicide when each of these exclusions has expired, which may take anywhere from two to three years following a policy on average, depending on the insurer.
At Lapeira & Associates LLC, we do our best to ensure that our clients are well-protected with affordable and comprehensive policies. Our company will always provide for your every need. Contact our agency now at (855) 963-6900 or CLICK HERE for a free quote by clicking here to learn more about how we can assist you. Topics and coverage discussed in this article are not guaranteed, consult with your agents to determine what your policy does and does not cover. We are more than happy to help!
