Suicide Clause - Life Insurance

What Is Suicide Clause in Life Insurance?     

<lingo>Some types of life insurance policies will include a suicide clause. This is a specific component of the plan that outlines whether or not the policyholder’s suicide would allow for the life insurance policy to continue. In many situations, a life insurance policy that includes this clause will not provide a death benefit to the named beneficiary if the policyholder’s death is ruled a suicide by the coroner. This can mean that the policy is null and void if the individual commits suicide, which is defined as any action in which the individual kills him or herself.</lingo>

Suicide Clause Clearly and Briefly Explained

A life insurance suicide clause will explain if and when a party’s suicide is covered by the policy. It is important to read through these terms. Most of the time, life insurance policies will have this clause in place to cover the first two years of obtaining the policy. The clause is in place to prevent people from obtaining a policy and then committing suicide as a way to leave behind funds to their loved ones. While this may help the family, it is a high risk for the insurer. Nearly all life insurance policies have this in place at least for the first two years. Some extend it throughout the policy term.

<twitter>Some types of life insurance policies will include a suicide clause. This is a specific component of the plan that outlines whether or not the policyholder’s suicide would allow for the life insurance policy to continue. </twitter>

There are many stipulations and clarifications that must come from a suicide clause. Generally, it applies to any type of self-inflicted injury that causes death. However, it may not apply to situations such as a drug overdose, unless the coroner determines the individual overdoses on drugs purposefully to end their life.

It is important to know that the burden of proof of the suicide falls on the hands of the life insurance company. That means that unless the coroner rules that the death is a suicide, the life insurance company must prove that the death was in fact a suicide. That can be very difficult to do in some situations. However, if the court rules that the death was in fact a suicide, the heirs and named beneficiaries on the policy would not receive compensation.

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