Does Life Insurance Cover Suicide? The Answer is Complicated
Does life insurance cover suicide? Yes, but there are some important things you need to know because this is a complicated topic.
OK I have to admit this is one of those posts I hesitate to write. My wife and I have people in our family who have mental challenges and we know firsthand that life is not always a bowl of cherries.
In fact, one of my wife’s best friends committed suicide many years ago. Sadly, loved ones left behind always wonder if there was something they could have done differently.
If you are feeling down, know you are not alone and there is help out there. Please reach out to one of the many helplines to speak to someone if you feel overwhelmed. Click here to speak to a counsellor now…
…and if you are a family member concerned about how a suicide impacts your policy. I have some information for you.
Who Am I & Why Do I Care?
My name is James Heidebrect, the founder of Policy Architects. We are a small boutique agency that serves the needs of Canadians from coast to coast.
As a Dad, Husband and Son I know just how tangled up life can get. Periods of depression are not uncommon in today’s world and thankfully there is more dialogue about this than ever.
Back in the 70’s and 80’s this wasn’t the case. The stiff upper lip approach was more common than not so people were forced to deal with their emotions in private.
With the current quarantine situation I imagine many of us are dealing with anxiety and the blues. If you are feeling sad or anxious please reach out to one of the many resources available. The time to conquer these feelings is today. Don’t wait until they become too much to deal with.
“Quinlan-Jacob said these uneasy feelings can come as a shock to people who weren’t dealing with mental-health issues before the pandemic. She said those who are noticing a disrupted routine, struggling to get out of bed or are experiencing intense emotions should reach out for help, both with personal connections and professionals.”
“Each level of support can offer something different. We need a community of people. We need our own village to help support us,” she said.”
‘Heartbreaking’: Suicide rates expected to rise as COVID-19 grinds on
Does Life Insurance Cover Suicide?
Please Note: The Two Year Contestability Period & Suicide Clause
If you are asking yourself does life insurance cover suicide – then you need to know a little bit more about the way policies are drafted.
At the end of the day life insurance is a business, which means making money is the goal. This is why you undergo an underwriting process for traditional term and permanent life insurance coverage.
This includes a medical exam where a nurse takes your blood pressure, collects blood and urine samples, weighs and measures you, and asks a battery of health and lifestyle questions. This data is sent to an underwriter that gives you a rating:
- standard (average health)
- preferred (good health)
- preferred plus (excellent health)
- Rated (medical issues)
- Declined (serious medical issues)
Life insurance companies insert a 2 year contestability period which allows them to investigate a claim if you die before this period is over. This protects them from fraud.
So let’s say you know in your heart you are not well – you take out some coverage, lie to your agent about your concerns and die 6 months later. Please know the insurer will go through your medical background with a fine tooth comb to see if there was anything you withheld.
If they find something of note your beneficiary will not inherit a dime.
There is also typically a suicide clause
Much like the contestibility clause, if the policyholder commits suicide in the two year window, the life insurance company will NOT cover the claim. This specific situation is covered by a suicide clause.
Does Life Insurance Cover Suicide?
Suicide After the 2 Year Contestability Period: Will the Death Benefits Be Paid?
The period AFTER the 2 year contestability period expires is called the Incontenstibility period. This is meant to protect policyholders from life insurance companies ducking out on their responsibilities.
That said it does not apply in cases of fraud. For example let’s say a policyholder is bipolar and hides this from their agent during the application process. If this information comes out after a suicide, the insurer will not pay the claim.
If you lie on your application the insurer can deny the death benefit at any point.
Other than that, the claim will be paid out even if the policyholder commits suicide.
Mental Health Questions Are Asked During the Application Process
Life insurance companies know that mental health impacts people’s lives GREATLY. This is why they ask whether or not you have been treated for:
- Depression
- Anxiety
- Suicidal Ideation
- Schizophrenia
- ADHD
- Bipolarity
- Psychosis
They want to know if you are being treated by a counsellor or doctor, are taking medication or if you’ve missed work. This information is used to determine your rating…
…OR possibly decline you if they feel your mental health is too big of an issue. It’s a way for the life insurance companies to protect themselves from a potential suicide.
If you have mental health issues give us a call at Policy Architects today. Some conditions are viewed less favourably that others which means a no medical life insurance policy may be your best bet.
Life Is Difficult & Especially During Lockdown
Even the most positive people go through difficult days…
…especially during times of turmoil, like the quarantine lockdown.
It’s very important to address your feelings even if they feel trivial. Reaching out to friends, family or counsellors can make all the difference in the world.
Remember with the right treatment, difficult days WILL pass. We at Policy Architects are sending you and your loved ones lots of good energy during this difficult period.
If you have any questions about how your mental health impacts your insurability contact us today. We can go through your options to find the RIGHT coverage for you and your family.
