Life insurance could cover suicidal death if the insured bought the policy two to three years before passing. But suppose the insured passes away due to suicide within the first two years of taking out a life insurance policy. In that case, life insurance doesn’t cover this. However, there are two clauses in most life insurance policies that protect the company in the case of a potential suicide: the suicide clause and the incontestability clause.
What Is The Life Insurance Suicide Clause?
The life insurance suicide clause protects insurers from paying benefits for death caused by suicide. In the event of a suicide, the insurer can deny the claim if the suicide clause is still in effect.
This period covers the first two years of the life insurance policy. During that period, the insurance company can try to investigate your claim and deny it if they can prove that the death was suicide or intentional.
It’s essential to note that life insurance claims may be denied if the policy was brought within two years of the suicide. But once the suicide condition has passed, the insurer will typically cover your claim to the death benefit in full.
What Is A Life Insurance Incontestability Clause?
This clause provides that the insurer can’t deny or contest a claim once the set period has expired. The insurers can only challenge a claim if they detect fraud o misrepresentation.
However, before the start of the incontestability clause, the insurance company has two years to contest or deny a claim. If the insurance company believes the cause of death was suicide or intentional, they can decide to investigate during this period. Your claim could be denied if proven the policyholder passes way through suicide.
Suppose the incontestability and suicide clauses have expired, and there is no proof of fraud or misrepresentation. In that case, life insurance should cover suicide, and the death benefits should be paid to the beneficiary.