Suicide is a difficult topic that many people prefer not to think or talk about. However, it is an unfortunate reality that suicide does occur, leaving loved ones to pick up the pieces. When someone takes their own life, it can be financially devastating for their family in addition to the immense emotional toll. Life insurance can provide critical financial support, but standard policies often exclude coverage for suicide.
If you’re considering life insurance that covers suicide for yourself or a loved one, it is important to understand how suicide factors into coverage. With the right policy from an understanding provider, you can gain coverage that includes suicide. Here’s what you need to know about securing life insurance that covers suicide.
Does Life Insurance Cover Suicide?
Suicide is generally not covered in the first two years of a life insurance policy, but it is after that. This two-year period is referred to as the suicide clause.
If a suicide occurs more than two years after purchasing a life insurance policy, the policy’s death benefit will be paid to the policy’s customers.
The Suicide Exclusion in Traditional Life Insurance
Traditional life insurance typically provides financial protection to beneficiaries in the event of the policyholder’s death. However, it is important to note that not all causes of death are covered under traditional life insurance policies.
Most life insurance policies have a suicide exclusion period, which is a period of time after the policy goes into effect when the insurance company will not pay out if the insured individual dies by suicide. This period is typically two years from the policy start date.
The reasoning behind suicide exclusion periods makes logical sense from the insurance company’s perspective. If someone takes out a life insurance that covers suicide policy with the premeditated intent of ending their life and having their family collect the payout, the company could stand to lose a lot of money. The exclusion period gives the insurance company time to better evaluate the risk of insuring that individual.
While understandable from a business standpoint, suicide exclusion clauses create hardship for grieving families. The last thing loved ones need after a suicide loss is to learn the insurance money won’t be paid. This highlights the importance of being aware of exclusions and limitations when purchasing life insurance.
Options for Getting Coverage for Suicide
If you or someone you care about is considering self-harm, it’s a good idea to look into life insurance policies that include suicide coverage. Here are a few options for obtaining life insurance that covers suicide:”
- Buy a policy with no suicide exclusion period. Some providers offer policies without any exclusion period, meaning suicide is covered from day one. These policies may come with stricter underwriting requirements and higher premiums.
- Extend the exclusion period. Rather than the typical two years, you may be able to get a policy with a five year exclusion period before suicide is covered. This can be a good middle-ground option.
- Add a rider for suicide coverage. Some providers will allow you to add a rider to your policy that specifically covers suicide. There is generally an additional cost for this rider.
- Build up coverage time. If you already have life insurance but it is subject to the standard two year exclusion period, keep the policy in force for at least two years before considering suicide. This ensures the death benefit will be paid out.
- Replace an existing policy. You may be able to replace an existing policy with one that covers suicide from a different provider. This offers you quick suicide coverage.
As you explore your options, be upfront with providers about any mental health conditions or suicidal ideations. Honesty is key for determining eligibility and securing the appropriate coverage.
What Life Insurance Policies Typically Cover Suicide?
Certain types of life insurance that cover suicide are more likely to provide inclusive coverage for suicide. Here are some policy types that often include suicide coverage:
- Guaranteed issue life insurance: With guaranteed issue policies, coverage is extended without a medical exam. This makes it easier to qualify for coverage even with health conditions. Many of these policies do not have suicide exclusion periods.
- Final expense insurance: Final expense or burial insurance provides relatively small death benefits, usually between $5,000 to $25,000. These policies may cover suicide from the outset or after a short exclusion period.
- Group life insurance: Group life insurance through an employer often covers suicide just like any other cause of death. However, you lose this coverage if you leave your job.
- Convertible term life insurance: You may be able to convert a term life policy to a permanent life policy without new underwriting. This allows you to carry over your suicide coverage.
- Accidental death insurance: Accidental death policies pay out if death is due to an accident. They typically exclude suicide. However, some may pay out for deaths ruled accidental that may have been self-inflicted, like drug overdoses.
As you seek out policies, read the fine print and ask direct questions to confirm suicide coverage specifics. An experienced life insurance agent can point you towards providers with more flexible options.
Suicide Risk Assessment in Life Insurance That Covers Suicide Underwriting
Insurance companies conduct extensive underwriting and evaluation of applicants to estimate risk levels before issuing policies. If you have a history of suicidal thoughts, mental health issues, or suicide attempts, it will most likely be revealed during the underwriting process.
Factors the insurance company may assess include:
- Past suicidal behaviour or attempts
- Any hospitalizations due to suicide risk
- Mental health conditions, especially those that increase suicide risk like depression and bipolar disorder
- Substance abuse that increases suicide risk
- Family history of suicide
- Tough situations or events that might make someone think about suicide.
- Existing treatment plans and support systems to manage mental health
Bringing up these details yourself rather than waiting for the provider to find them allows you to provide context and demonstrate the steps you’re taking to manage conditions. Open communication along with current treatment documentation can help facilitate approval.
Can You Get Life Insurance if Your Loved One Committed Suicide?
Family history is one of the factors insurance companies may evaluate. If you recently lost a loved one to suicide, this can potentially raise concerns and make approval more difficult and expensive.
However, a family history of suicide does not make you automatically ineligible for life insurance. Be prepared to provide information about the loss, your relationship with the deceased, and your current mental health status. With sufficient time passed since the loss and proper treatment if you are struggling with grief, you can likely obtain reasonably priced coverage.
Certain high-risk life insurance providers specialize in difficult-to-insure cases and may offer policies to those recently affected by a family member’s suicide. These policies typically have higher premiums but can provide much-needed coverage.
Pick the Right Life Insurance After Surviving Suicide Attempts
If you have personally attempted suicide, this raises concerns for insurance providers that provide life insurance that covers suicide. However, it is still possible to find affordable coverage with certain steps:
- Let time pass. Applying at least 6 months after an attempt allows you to demonstrate stability and commit to treatment.
- Document your treatment plan. Proof you are actively addressing mental health concerns helps reduce risk in the insurer’s eyes.
- Consider a higher-premium policy. Higher rates in the first few years eventually drop down with renewals and demonstrate lower risk over time.
- Look into guaranteed issue policies. As they don’t require medical exams, these policies make it easier to qualify after a suicide attempt.
- Apply with high-risk insurers. Companies that specialize in impaired risk cases may offer policies others won’t.
With proof of ongoing treatment and a commitment to health, insurance can often be secured even soon after a suicide attempt.
Finding Affordable Coverage as a High Suicide Risk
If you have multiple risk factors for suicide, such as past attempts, hospitalizations, substance abuse, and mental health conditions, insurance can be more challenging. However, affordable life insurance that covers suicide coverage is still possible in most cases.
Here are some tips:
- Look for policies that have longer exclusion periods. A 5-year exclusion period is easier to obtain than no exclusion period.
- Join in burial or final cost insurance. Smaller death benefits are easier to approve.
- Apply with high-risk service providers. They provide policies with higher initial rates that gradually decrease as you demonstrate lower risk.
- Select a guaranteed issue policy. There is no medical exam required to obtain approval.
- Find group coverage through your workplace or associations. This usually includes suicide coverage with little to no underwriting.
- Create a trust fund. If you do not qualify for individual coverage, you can set up a trust to provide funds in the event of your death.
With persistence and a high-risk policy, life insurance is accessible even with multiple suicide risk factors in your history. Finding the right provider is key.
Purchasing Life Insurance You Can Count On
While it may seem difficult, purchasing life insurance that covers suicide is usually possible with the right approach. Make certain you understand the policy’s exclusions and limitations. Inform providers openly about your mental health history and the steps you’re taking to manage your conditions. Before applying, allow some time to pass after any suicidal events or attempts. Consider starting with a higher-priced, higher-risk policy that can later be converted to a lower-cost option. Most importantly, stick to your treatment plan and take steps every day to improve your health and stability. With due diligence, life insurance can provide coverage for suicide and provide peace of mind.
When faced with the difficult subject of suicide, life insurance can provide a sense of security in the midst of tragedy. While standard policies frequently exclude suicide for a period of time, there are options that provide greater coverage. Individuals at risk of suicide can gain the vital financial protection their families require by understanding suicide exclusions and limitations, being open with providers about your history, allowing time to pass after attempts, and securing coverage from high-risk insurers. Though a sensitive subject, suicide-inclusive life insurance alleviates financial stress during a time of unimaginable grief. With compassion and perseverance, coverage can be obtained to provide assistance when it is most needed. While it is always secondary to mental health treatment and suicide prevention, comprehensive life insurance helps to alleviate some of the burden in times of trouble.