Life Life insurance for suicide

STEINER

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Hi,

I find it incredible that suicide would not invalidate a person's life insurance, yet there is a high profile example in the media at the moment detailing where a payout did occur. Does it depend on the particular ploicy?
 
The coroner's verdict where nature of death cannot be confirmed, e.g. misadventure as opposed to suicide would be a deciding factor I imagine.
 
Some policies are invalidated if a suicide occurs relatively soon after they are taken out. The one instance about which I know the facts involved a two-year limit.
 
Very difficult to prove many cases of death by suicide - look at all those single vehicle accidents with driver only in the car at 3am or 4am?
 
as far as i can recall if a Policy is assigned to a lending agency then the suicide clause will not be a factor and sufficient funds will be paid to clear the loan if the sum insured is sufficient.
 
It depends on the wording of the particular company, but an exclusion period of the first 24 months would not be uncommon. I know one insurer that will payout before 24 months, if the policy is linked to a mortgage.
 
I know some life company that will not pay out if it happens in the first 12 months, I was surprised to hear this myself recently.
 
I was surprised to learn earlier this year due to suicide of a family friend, that life assurance will pay out at all in the case of suicide - I had it in my head that this was not covered so as not to create any temptation for someone who might be in dire straits and think that things would be 'better'.....I use that word loosely but you know what I mean.

I wouldn't want to see a grieving family who have lost a loved one to suicide have financial difficulties because insurance wouldn't pay out, but at the same time, in these tough tough times for many people, I would hate even more to think that the fact that they would pay might have any impact on someone's decision to end their life - when someone is severely under pressure and not thinking straight.

I would like to stress I am not referring to the high profile case mentioned by the OP, I'm speaking generally.

What are others' thoughts on this? Did it change many years ago and is that why I thought it didn't pay, did it used to be different ?
 
I suppose it is recognising that death by suicide is a probable outcome of serious medical conditions like depression or bipolar disorder, in the same way that death is the probable outcome for conditions like Motor Neurone disease. The fact that the death is self-inflicted in end is almost irrelevant - it is the outcome of a medical condition that the person didn't choose to have.
 
I suppose it is recognising that death by suicide is a probable outcome of serious medical conditions like depression or bipolar disorder, in the same way that death is the probable outcome for conditions like Motor Neurone disease. The fact that the death is self-inflicted in end is almost irrelevant - it is the outcome of a medical condition that the person didn't choose to have.

To say that suicide is a probable outcome from mental health issues is wrong. I think all suicide's are preventable, as long as the person receives the correct treatment (which unfortunately is a major issue in this country). Suicide should never be seen as an option for those with mental health issues.
 
I agree with you Rainyday in so far as that in some cases suicide is the end result of mental disorders if left untreated or indeed untreatable.

The big question here is, is it ethical/moral to pay life insurance claims for suicide?

Is it possibly the case by paying claims on suicide, are the life insurance companies incentivizing people who are in extreme financial dire straits to commit suicide? There has been some high profile cases of this over the last 5 years.

I am only asking the question here and I think that there should be some sort of debate within the CBI on this subject.

Anyone else have a view on this?
 
I would be amazed if there was any correlation between life insurance pay outs and suicide. The vast majority of suicide cases are still in the young male age bracket. Most of these would not have life insurance policies in place. I think the paying out of life policies are less to do with the person themselves, and more to do with the partner's or families left behind, who would struggle financially after the loss of a loved one if the policy didn't pay out.
 
I suppose the starting point would be to see if this has been a significant issue in any/many suicides. I haven't heard of it coming up much.
 
Whilst it is correct that the majority of suicides are amongst youngpeople, and the OECD report yesterday showed a dismal picture, 2nd highest rate of suicide and self harm amongst young people in the EU. It would be foolish to dismiss any link between debt and suicide amongst adults.
 
From the terms and conditions of one life company. There is a 1 year exclusion with the exception of assigned policies.

No Lump Sum onDeathBenefit, Income on
DeathBenefit, Whole of Life Continuation
Benefit, Terminal IllnessBenefit or Children’s
Lump Sum onDeathBenefit is payable if the
Life Insured or a child of the Life Insured dies
by his or her own hand or act or is diagnosed
as being terminally ill as a result of his or her
own deliberate act within 1 year of the Policy
StartDate or within 1 year of the date of any
reinstatement of the policy or within 1 year of
a voluntary increase in Lump Sum onDeath
Benefit, Income onDeathBenefit and/or Whole
of Life ContinuationBenefit, or within 1 year
of being added on to the policy, whichever is
applicable, except that if the policy has been
Assigned to a third party in good faith,the
benefit payable is limited to the interest ofthat
third party which was acquired for monetary
consideration
 
Hi,

I find it incredible that suicide would not invalidate a person's life insurance, yet there is a high profile example in the media at the moment detailing where a payout did occur. Does it depend on the particular ploicy?

Please don't add to a family's pain by implying that he may have taken his life to pay off a debt. What desperate stress and despair that man must have been feeling. I hope your family is never faced with the loss of someone through suicide and never have to ask why or what if. You can't possibly know the full why of that man's decision.

Tragically people take their own life for so many reasons and you might never know what ultimately pushes someone over the edge. I think some of the comments on this thread lack an understanding of the complexity of mental illness, stress, anxiety or human suffering.

Suicide represents a tragic loss of hope. Please don't reduce that desperately sad action to any sort of decision to pay off a mortgage. Hopefully you will never know for yourself the stress and anxiety that man was living with.

If you are worried about insurance premiums going up because you erroneously imply that someone might choose suicide as an option, start a conversation about how to help those who have lost hope and feel that they are out of options and feeling that life has become unliveable. Penalising their families with poverty or guilt is not the answer.
 
If you are worried about insurance premiums going up because you erroneously imply that someone might choose suicide as an option....

No one on the thread has expressed any concern about premiums, you are misrepresenting the concerns of other posters. Suicide is a very complex issue. In family situations, a person may convince themselves that their family is better off without them. A significant contributor to stress over the last 6 years has been property debt because of the economic crash. The tragic extremes that people will go to to unburden their families from debt or risk of losing their home should not be underestimated.

It is socially better that there is a common misconception that insurance will not pay out in the case of suicide.
 
But what it being implied is that it is a choice that might be removed if there is no pay out incentive? That is so offensive and insensitive.

Most people who have felt suicidal will tell you that the awful compulsion is not a choice, so how would it make things better if their families were denied a payment?

I understand that it can look like an incentive, but really, look at the stress and anxiety that people are under. It is over simplifying an awful situation to suggest that a payment is an incentive. It is about loss of hope - deal with that and the lack of accountability and the stress that people are under. I heard a woman speaking about how she still received bullying calls from her lender even after her husband had taken his life after enduring months of daily harassment from them. That is the problem, not the existence of insurance premiums.

You cannot reduce a persons action to the existence of a payment incentive. It really is insensitive and reductionist.
 
As has been said above, life insurance policies typically have an exclusion period ranging from 12 to 24 months depending on the company. Personally I believe this is a reasonable approach.

  • It would be incredibly rare for someone to plan their suicide 12 - 24 months in advance. So virtually nobody would start a life insurance policy with the intention that their family could claim on it 12 - 24 months into the future.
  • If somebody starts a life insurance policy now and they develop any terminal illness in the future, the insurance policy covers them for this change of health, provided that they answered all the questions truthfully at the outset. The insurance companies treat suicide broadly the same, aside from the 12-24 month exclusion period. So if a person is not suicidal when they start the policy but becomes suicidal and ultimately ends their life by suicide more than 12-24 months later, that's a valid claim.
 
As said earlier it is very rare for a coroners inquest to make a finding of suicide.
 
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