Does Life Insurance Cover Suicide?

What to Expect From a Life Insurance Policy

A women looking despondent

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More than 5.4 million people are survivors of suicide loss in the U.S. Losing a loved one this way is painful. Not only do you mourn their loss, but there are often many questions left unanswered, too. Facing a denied life insurance claim can be an added burden.

Here's what you need to know about life insurance and what you can expect from your life insurance policy if the cause of death is suicide.

Does Life Insurance Pay After a Suicide Death?

Whether the death benefit will be paid out after a suicide may depend on when the death occurs. One common rule of thumb is that if a policy is purchased within two years of a suicide, the death benefit is not paid.

In 2019, there were more than 47,000 deaths by suicide in the U.S. This manner of death is shocking and often a surprise to the people left behind. Of course, it would only be fair that loved ones left behind should benefit from the life insurance policy, but that's not always the case.

How Life Insurance Policies Work for a Suicide Death Claim 

The insurance company may pay the beneficiary of a life insurance policy after such a death, but it depends on the terms of the contract. The main factors that affect whether a claim is paid out in these cases are the two clauses, or terms, below:

  • The suicide provision
  • The incontestability clause

These sections of the contract are meant to stop people from only buying a policy because they want to leave money to their family after a planned death.

The Incontestability Clause

This clause prevents an insurance company from contesting, or challenging, a claim after a certain time frame has passed. This time frame is called the "contestability period." This clause is designed to protect the insured down the road. Suppose you have made payments for many years, but when your spouse makes a claim after your death, the insurance company denies it, because you misspelled something on your form. This clause is intended to prevent that sort of situation. Once the set amount of time has passed, then a claim becomes "incontestable" except for big issues such as fraud.

However, before that time is up, a claim might be denied for a number of reasons. According to the National Association of Insurance Commissioners (NAIC), these reasons may include death by suicide.

Contact your insurance agent to find out the details of your contract. They will be able to tell you the exact length of time the clause dictates.

If the contract has been in force for less than two years, then the insurance company may decide they have reason to look further into the claim. If suicide is found to be the cause of death, they may deny the claim.

In addition to this clause, a life insurance policy may also have a suicide provision or clause.

The Suicide Provision

This clause gives details about how or whether the policy pays out when the insured takes their own life. It often also comes with a two-year time frame. If a policy has this clause in it, and the insured dies by suicide within the time frame, a claim may be denied.

When you buy life insurance, your agent must explain all of these clauses and terms to you as part of the purchase process.

How the Clauses Differ

The suicide provision and the incontestability clause are not the same. The incontestability clause is broader and addresses the insurer's right to contest or deny a claim during a set time period. In addition to suicide, it may mention:

  • Death during an illegal act
  • Lying on forms
  • Drug and alcohol abuse issues

It is wise to get the exact details of the policy when signing the contract so you avoid being surprised or having a claim denied later.

When Does a Life Insurance Policy Pay Out for Suicide?

Be sure to see the contract's exclusions section to check for a mention of suicide. After the contestability clause expires, the policy will pay out. That is, as long as suicide is not one of the exclusions.

Here's an example. Suppose Michael and Sandra purchased a 10-year term life insurance policy when they got married. Over the years, they paid their premiums on time and kept the same policy in force.

Five years later, Sandra began treatment for depression. She seemed to be doing well with the treatment. But one day, Michael was shocked to find out that Sandra had taken her own life. He was crushed. Family members helped him get all of Sandra's affairs in order and found their life insurance policy. Michael made a claim. The money would not bring Sandra back nor relieve the loss, but it would help with some of the costs he found himself struggling with.

Michael was surprised and relieved to see that the claim would be paid. Even though ​the cause of death was suicide, the clause had expired, and so it no longer applied.

How Does It Work When an Insurance Company Denies a Claim After Suicide?

Let's look at a different example.

Jeff had kept a life insurance policy for 20 years. When it came time to renew, he decided to shop around for a better policy, and he switched to another kind of policy from the same company. A year later, he died by suicide.

Because he had switched his life insurance policy, the contestability period had reset. The suicide provision now applied again. His family were denied their claim. 

Key Takeaways

  • If you or someone you know is suffering from depression or mental health issues, the most important thing you can do is get help now. You are not alone.
  • If you are a survivor of a loved one's suicide, you are among millions of people in the U.S. Don't be afraid to reach out for help.