Suicide is the cause of death for nearly 30,000 people per year throughout the United States. When families lose a loved one to suicide, the emotional and financial challenges can be devastating for those left behind. While the benefits of a life insurance policy can provide critical replacement income and financial security for loved ones, survivors can face dire financial circumstances when an insurance carrier denies a claim for death benefits.
From religion to law, there are many official and unofficial rules, cautionary tales and myths about suicide. Insurance has made its way into this mix of misinformation. Because of this mythology many believe without question that life insurance benefits will not be paid if someone dies of suicide. While many people believe that a life insurance carrier will not pay out death benefits if the insured commits suicide, the reality is that insurance companies often pay out death benefits on such claims. If the policy does not expressly exclude coverage for suicide, the critical issue might be the timing of the suicide.
Some policies may exclude coverage for suicide during the coverage period. Other policies will not pay death benefits if the policyholder passes away as a result of suicide during the first two years of the coverage period (i.e. “the contestability period”). Generally, suicide will not preclude recovery if it occurs outside the two year contestability period, and the policy does not include an express exclusion for suicide.
If the alleged suicide occurs during the contestability period, the insurance company still must prove that the death was actually a suicide. A death that appears to be a hanging, for example, could actually be auto-erotic asphyxiation. Similarly, many apparent suicides are actually murders that have been staged to look like suicide. These cases need to be investigated because if the death is a homicide, then the beneficiaries of the life insurance policy may still be entitled to full benefits.
If you are the beneficiary under a policy where the insured is alleged to have died because of suicide, the policy must be carefully reviewed to determine if any provision excludes coverage of suicide beyond the contestability period.
The restrictions on suicide are obviously designed to prevent a policyholder from purchasing the best life insurance policy available and committing suicide before the ink on the policy is even dry. Depending on the circumstances, some insurance companies will return the premiums paid on the policy, but the insurer will deny other benefits.
Some policies contain exclusions that apply to non-disclosure of mental health issues or substance dependency. While an insurance company may require mental health tests or screening, other insurers make such screening optional. If an insured has a history of mental illness, depression or substance dependency that is misrepresented or not disclosed, the insurance carriers will investigate to obtain medical records and might deny coverage during the contestability period.
If you are the beneficiary of a life insurance policy who is denied benefits because the insured committed suicide, you might still be entitled to benefits.
You can reach Miami Life 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].