Life Insurance Suicide Exclusion
When a life insurance policyholder commits suicide, will the insurance company pay death benefits to the beneficiary? Or will the benefits be denied because of the suicide?
Unfortunately, this question arises all too frequently every year in Florida and throughout the country. In fact, according to the American Foundation for Suicide Prevention (AFSP), more than 44,000 Americans died by suicide in a recent year.
Other related information:
- Suicide is the tenth leading cause of death in the US and there is an average of 121 suicides per day
- 3,035 Floridians died by suicide in a recent year
- Florida’s suicide rate, at 13.84 per 100,000 deaths, was higher than the national rate of 12.93 per 100,000 deaths in a recent year
- Leading methods of suicide are: firearm, 49.8%, suffocation, 26.8%, poisoning, 15.4%, other, 7.9%
- The AFSP reports that about 90% of individuals who committed suicide had a diagnosable mental health problem
Suicide Clause in a Life Insurance Policy
A suicide clause is part of the life insurance policy and attempts to bar recovery of benefits if the deceased commits suicide during the first two years of the policy. Almost all life insurance policies have a suicide clause, although the policyholder may be unaware of it, may not find it, or may not understand it unless they carefully examine their policy or consult with a life insurance professional. If the insured commits suicide after two years, the life insurance company generally will pay the death benefits.
Suicide is an intentional act, and the insurance company must prove that the insured intentionally ended their own life. They may attempt to prove suicide through medical records, the medical examiner’s records, police records and otherwise. However, medical professionals and the authorities do not always come to a definite conclusion as to whether suicide occurred.
The insurance company may choose to investigate on its own, but it is unlikely that they will be able to prove what police investigators could not. It is important to understand that just because a policy has a suicide clause it does not necessarily mean that it will bar recovery of benefits, even if the deceased died by suicide within the first two years. However, it often requires an experienced life insurance claims lawyer to challenge the life insurance company’s denial.
Two Year Contestability Clause
Fl. Stat. 627.455 provides a two year contestability period. If the insured commits suicide during the two year contestability period, the life insurance company will normally decline benefits. Instead, they’ll return the premiums to the estate of the policyholder. During the contestability period, the insurance company will have the opportunity to review the application and decide whether it contains any material misrepresentations and/or omissions.
For example, if the applicant failed to disclose a mental or physical health condition when he or she purchased the policy, the insurance company may choose to decline the death benefits based on the assertion that they would never have insured the policyholder to begin with. Or they may say that they might have insured the policyholder but they would have charged substantially higher premiums.
The two year contestability clause is different than the suicide clause and may easily be confused by a lay person. Again, it is highly advisable to discuss your case with an experienced life insurance claims attorney.
You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].
http://afsp.org/wp-content/uploads/2016/06/2016-National-Facts-Figures.pdf http://www.leg.state.fl.us/Statutes/index.cfm? App_mode=Display_Statute&Search_String=&URL=0600-0699/0627/Sections/0627.455.html https://www.cdc.gov/nchs/data/hus/hus06.pdf https://afsp.org/about-suicide/suicide-statistics/