The Centers for Disease Control lists New York as having the lowest suicide rate in the country. But a single death by suicide is too much. After that, beneficiaries of a life insurance policy are generally entitled to receive the death benefit regardless of how the insured person died. As a result, people who are considering suicide should not be discouraged from taking out a life insurance policy.
While your beneficiaries may not receive death benefit during the contested period, it will almost certainly be paid to them if they wait until that period has expired. Suicide is generally not covered for the first two years of a life insurance policy, but is covered after that. This two-year period is known as the suicide clause. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life's financial journey.
Instead of disclosing this information to your life insurance company, you keep it to yourself and the doctor won't discover it during the medical exam prior to the evaluation. However, some life insurance policies include impeachment and suicide provisions that must expire before a death by suicide is covered. This clause means that if the policyholder dies by suicide within a certain period of time, usually two years, the death benefit will not be paid. Any change to a policy, such as adding coverage or converting a temporary policy to a lifetime policy, can reset the clock and the exclusion period will begin again.
If you or a loved one is thinking about committing suicide, contact the National Suicide Prevention Hotline at 1-800-273-8255 or via live chat. However, maintaining the same death benefit and moving from a temporary life insurance policy to a full life insurance policy should not reinstate the exclusion period. If a suicide occurs more than two years after obtaining a life insurance policy, the life insurance policy will pay the death benefit to the beneficiaries of the policy. If you are the beneficiary of the life insurance policy, you'll need to know the name of the insurer that has the policy and a certified copy of the death certificate in order to file a claim.
In particular, the exclusion period restarts when changes are made to the life insurance policy, even if the insurer does not change. This is a period, usually two years, within which the company can investigate the death and see if it was a suicide. While murky scenarios, such as death from an overdose of a prescription drug, leave room for debate about insurable and uninsurable causes of death, challenging a refusal opens the door to the possibility of receiving some level of payment. If a covered person dies as a result of suicide, their beneficiaries will generally receive the death benefit.
Group life insurance, the type of coverage provided as a work benefit, generally pays a death benefit on suicide requests without the two-year impeachment restriction.