Agent Owner, Gilmore Insurance Services, Marysville, Washington State
After the contestability clause in the policy ends the answer is "yes" an insurance company will pay a claim even if suicide was involved. Some states reduce the contestability period down from two years to one. The contestability clause or contestability period is the period of time an insurance carrier can call into question any answer provided in an application by the insured, The insurance carrier can also create temporary exclusions to be in effect during that period of time.
If false information is found during this period, a policy can be resended, premiums returned, claim or not. Same for an stated act declared in the policy. Always a good idea to review exclusions page of any insurance policy. After that period has ended, the insurance company cannot contest something like a suicide.
In addition to the other information, it's important to know that if the policy was replacing other coverage when it was issued, some states do not allow a new contestability period beyond what the replaced policy had.
Kentucky for example would not allow a company to not pay a claim if someone committed sucide a week after buying the policy IF it replaced an existing policy that had been in force for over two years. The new policy is non-contestable from the first day up to the face amount of the old policy. It's very important in Kentucky to make sure you receive a copy of the replacement form and keep it with your new policy.
Most states do not have this added protection but if your does, it can make a huge difference with your insurance claim.
Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Life insurance does not pay a death claim for suicide during the contestability period. That period begins on the issue date of an in force policy to it's second year anniversary date. After two years, the death claim would be paid. Keep in mind that fraud is an additional issue that may be incorporate into a claim dispute.
Life insurance will pay for suicide if the suicide occurs after the first two years of most policies. If someone is purchasing the policy with the desperate idea of paying off debts or providing for someone else through their death, that two year waiting period will usually discourage that, or give them some time to find other rational solutions.
Licensed Life Agent, Life and Finance/ 50 States, New York
Life insurance will pay out to beneficiaries if the suicide is after two years after the start of the premiun. Studies have showed that many people do not commit suicide withint two years of the policy start. So there is n burden on the reserves. Some states may be different however in New York this will apply. All information must be valid and truthful.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
This is an extremely sensitive topic. The death of a spouse can be life-shattering. A suicide can make it almost unbearable. Not too long ago a friend and client committed suicide. She had been going through a tough spell emotionally, and then almost out of the blue took her own life. Left behind a loving husband and three young boys. Very, very sad.
I expedited the claim, as is my usual practice. This job is usually tough, and the fact that her family and mine are friendly made it really hard. My friend, her surviving husband, was so upset he couldn't even complete the claim form. I did it for him.
The insurance carrier paid the claim as the policy was over two years old. That is standard practice. Will they never pay before then? I can say that I know of a case with a very high-profile insured who apparently committed suicide just a year after his policies were issued (he had several - lots of coverage). The carriers, of course, initially refused to pay. The insured's lawyers eventually convinced them to do so: why would they want the bad publicity of not paying a claim?
Will they always pay after two years? My own feeling is yes, generally, but suspicious circumstances may interfere. If the carrier has reason to believe that this tragic event had been planned to take place right after the two-year anniversary…..
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
The concept involved is, “contemplation.” The companies have adopted a fairly universal clause that will contest death by suicide during the first two years of the policy. The idea is that a person would not buy life insurance in contemplation of suicide two years later. Sometimes a person will buy a policy in contemplation of suicide and try to mask the suicide by staging an accident. Those cases can lead to litigation.
If a person is having suicidal thoughts when purchasing a life insurance policy and has been treated, the insurance company will decline the application. Therefore, without that knowledge, the life insurance company will protect themselves with a two year contestability clause. This gives the carrier a two year window just in case anything was missed during underwriting. After the two years suicide or any other cause of death is then covered except a cause specifically excluded by the policy such as act of war.
It depends in which state the application was taken. Certain states, such as Missouri, have an unlimited contestability clause. If the Insurance Carrier can prove that the policy was purchased or replaced with the intent of committing suicide in the future, the carrier is required to refund premiums plus interest but not pay the death claim.
Life & Health Insurance Agent, The Tooker Agency, Riverhead NY
The answer for policies issued in New York is yes. Life insurance policies issued in the state of New York can not exclude suicide after two years. Most states have either a one or two year maximum exclusion for suicide. This always seems to surprise people. The reasoning is that anyone who is taking out a life insurance policy in contemplation of committing suicide will probably not wait two years before committing the act.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
Certainly the question has been well answered above, but I'll go ahead and add my "two cents" worth...
Insurance companies aren't in the business to give away money for free. So they take reasonable cautions when placing policies. One of those cautions is the exclusion for suicide. Most states have the two year exclusion for suicide, so if committed within two years of implementing a policy they will only return the premiums paid and not the Face Benefit of the policy. With a couple exceptions as mentioned above, after the two year contestibility period most policies will indeed pay the benefit amount even in the case of suicide.
Yes, after the contestability period.
Life insurance policies normally don’t cover suicide deaths that occur during the “contestable period,” which under the laws of most states, is the first two years after the policy is purchased. State laws limit coverage because lawmakers don’t want to encourage suicide. They presume that insureds may be less tempted to take their own lives if they know life insurance benefits won’t be paid to their survivors. Lawmakers also want to avoid abuse of life insurance, the purpose of which is to provide financial assistance to survivors after natural or accidental death.
Great question! After the contestaability period of 2 years, most life policies will pay out for suicide. If suicide occurs before those 2 years are up, the premiums that had been paid will be returned (depending on the company). Some people try to get life policies to help their family pay off debts after committing suicide, but the 2 year waiting period is a good way to discourage that practice.
I hope the question wasn't sparked by such an event in your world :-( Being late to the answer-game, all the comments above are spot on. Combine them all together an you have a wonderful resource. I have nothing more to add other than... "I hope you are ok."
-gravy
Manager, Marindependent Insurance Services LLC, California
As a general rule it will not pay during the contestability time period. This time period is often two years with most policies.
After that time period it likely would. However, as with all insurance situation, you will want to read your actual life insurance policy to be perfectly clear.
Owner /Agent, Guardian Senior Protection, Dallas Fort Worth Texas
Individual life insurance doesn't cover suicide within two years (one year in some states) after the policy begins, but may refund the premiums. Employer-paid policies typically do cover it.How a life insurance policy will handle suicide depends on the type of coverage — individual versus employer-paid group life insurance. Individual policies are the kind you buy on your own; group life insurance is the kind you get through an organization, such as an employer.
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If false information is found during this period, a policy can be resended, premiums returned, claim or not. Same for an stated act declared in the policy. Always a good idea to review exclusions page of any insurance policy. After that period has ended, the insurance company cannot contest something like a suicide.
Kentucky for example would not allow a company to not pay a claim if someone committed sucide a week after buying the policy IF it replaced an existing policy that had been in force for over two years. The new policy is non-contestable from the first day up to the face amount of the old policy. It's very important in Kentucky to make sure you receive a copy of the replacement form and keep it with your new policy.
Most states do not have this added protection but if your does, it can make a huge difference with your insurance claim.
I expedited the claim, as is my usual practice. This job is usually tough, and the fact that her family and mine are friendly made it really hard. My friend, her surviving husband, was so upset he couldn't even complete the claim form. I did it for him.
The insurance carrier paid the claim as the policy was over two years old. That is standard practice. Will they never pay before then? I can say that I know of a case with a very high-profile insured who apparently committed suicide just a year after his policies were issued (he had several - lots of coverage). The carriers, of course, initially refused to pay. The insured's lawyers eventually convinced them to do so: why would they want the bad publicity of not paying a claim?
Will they always pay after two years? My own feeling is yes, generally, but suspicious circumstances may interfere. If the carrier has reason to believe that this tragic event had been planned to take place right after the two-year anniversary…..
Sometimes life is like a mystery novel.
Insurance companies aren't in the business to give away money for free. So they take reasonable cautions when placing policies. One of those cautions is the exclusion for suicide. Most states have the two year exclusion for suicide, so if committed within two years of implementing a policy they will only return the premiums paid and not the Face Benefit of the policy. With a couple exceptions as mentioned above, after the two year contestibility period most policies will indeed pay the benefit amount even in the case of suicide.
Life insurance policies normally don’t cover suicide deaths that occur during the “contestable period,” which under the laws of most states, is the first two years after the policy is purchased. State laws limit coverage because lawmakers don’t want to encourage suicide. They presume that insureds may be less tempted to take their own lives if they know life insurance benefits won’t be paid to their survivors. Lawmakers also want to avoid abuse of life insurance, the purpose of which is to provide financial assistance to survivors after natural or accidental death.
-gravy
After that time period it likely would. However, as with all insurance situation, you will want to read your actual life insurance policy to be perfectly clear.