Is Suicide Covered Under Life Insurance?

Life insurance is bought to ensure financial protection for the dear ones by the policyholder. It is meant to serve as a financial shield for the deceased dependents. An individual commits suicide when that individual has no motive to live further.

The misery that people go through their life, and the life-crushing impact it has on their families and dear ones is irreparable. In most cases, these deceased persons were only the earning members, and with their passing, the families’ monetary coverage stops to exist.

Life insurance companies do not cover all kinds of death. For instance, death because of murder by the nominee, criminal activity involvement, death under the alcohol influence, smoking, drugs, or because of involvement in adventure sports or other dangerous activities are not covered by this policy.

From 1st January 2014, insurance companies began covering suicides. For all the policies that were issued prior to January 2014, if the insured committed suicide within a year from the policy issuance date, the policy would become void.

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But, since 1st January 2014, the suicide clause was changed to replicate the below-mentioned changes:

• Traditional Life Insurance Plans: For this type of life insurance plans, if the insured commits suicide within 12 months of the policy issuance date, the nominee is permitted to get 80% of the premium paid.
• Market Linked Plans: For this plans, the nominee is allowed to get 100% of the policy fund value if the insured committed suicide within the initial 12 months of the policy beginning.

Terms For Suicide Coverage

The suicide cover is managed by the policy terms and conditions, which varies from firm to firm. Usually insurance firms cover suicide 1 year after the policy purchase. In case of the suicide of the insured, the company will give the sum assured to the candidate after thorough evaluation of the case. This waiting phase of a year is because of the moral risk and figures an essential exclusion in key life insurance policies.

If the insured suicides within the 12 months waiting time, the insurance firm might offer a percentage of the total amount paid. This clause is typically maintained to stop insurance fraud cases, where persons in debt buy a life insurance policy and suicide to assist their family avoid the complicated situation.

Exclusions 

Suicide cover would not be valid in the following conditions:

• Within 1 year of the renewal of a lapsed plan if the insured suicides.
• If the policyholder offers inaccurate or fraudulent details when purchasing the policy. 
• If the policy owner suicides, then the applicant cannot claim for it from the deceased insured employer.

Must Check

Term Insurance

Also Read:- Does Life Insurance Cover Suicide?

Conclusion

It is very essential to know that insurance firms carry out complete investigation and evaluation before disbursing suicide claims. In regards to the insured person’s families, insurance firms are dedicated to offering financial cover in case insured’s suicidal death.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.