Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Life insurance coverage is underwritten in a due diligence matter to discover any outstanding medical issues or questionable activities to properly price the premium. Any misrepresentations, misstatements or material omissions can lay the ground work for fraud resulting in a claim denial. If suicide occurs during the convertibility period the claim would also be subject the claim void.
Not paying the premium is the most common way of making life insurance void. There is a one month grace period after the premium is due for a term policy. If not paid by the end of that month, the policy will lapse and would not pay out the death benefit if death occurred. Permanent policies can use cash value to pay the premium, but you need to set the policy up that way.
Suicide will void a life insurance policy if it occurs during the first two years of the policy. So will death due to illnesses or other risk that were present and known about at the time of filling out the application, but were left out or lied about on purpose. For the policy to be void, death generally must occur within the first two years due to a cause related to those misrepresentations or omissions.
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Suicide will void a life insurance policy if it occurs during the first two years of the policy. So will death due to illnesses or other risk that were present and known about at the time of filling out the application, but were left out or lied about on purpose. For the policy to be void, death generally must occur within the first two years due to a cause related to those misrepresentations or omissions.