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Does Life Insurance Cover Suicide?

Individual life insurance doesn't cover suicide within two years (one year in some states) after the policy begins, but may refund the premiums. Employer-paid policies typically do cover it.
Insurance, Life Insurance, Personal Finance
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Along with the profound and painful questions that follow the loss of a loved one from suicide, there are practical and financial issues to address, too.

If the loved one had life insurance, a common question is whether the policy will still cover the death.

In general, there is coverage if your loved one:

  • Had free life insurance through work, paid for by an employer
  • Was insured under an individual policy that went into effect more than two years ago (one year in some states)
  • Was insured under coverage that he or she purchased through work and that went into effect more than two years ago (one year in some states)

Even if the death is not covered, it’s important to follow up with the life insurance company.

If the claim is denied because of suicide, the beneficiary is typically owed a return of the premiums that the policyholder paid for the insurance.

Many resources are available if you or someone you know is thinking about suicide

How individual life insurance handles suicide

How a life insurance policy will handle suicide depends in part on the type of coverage individual versus employer-paid group life insurance. Individual policies are the kind you buy on your own; group life insurance is the kind you get through an organization, such as an employer.

Virtually all individual life insurance policies contain a clause denying payment if the insured person dies from suicide during a certain period after a policy goes into effect, says Paul Graham, senior vice president of insurance regulation and chief actuary of the American Council of Life Insurers. The period is the first two years for most policies and one year for some, depending on the state where it was purchased.

“This is generally seen by the industry and regulators as sufficient time to prevent policies from being purchased by someone who intends to commit suicide,” Graham says.

If death from suicide occurs after this period, then the life insurance policy will pay out as it would for death from illness or other insured causes.

Even if the death is not covered, it’s important to follow up with the life insurance company.

If the suicide occurs within the excluded period, the life insurance company won’t pay the death benefit. Generally in this case the insurer will return the premiums paid for the policy, minus any premiums that were owed before death, Graham says. If it was a whole life or other permanent policy, any outstanding loans against the policy’s cash value would be subtracted as well, Graham says. The returned premiums would go to the policy’s beneficiary.

How group life insurance treats suicide

Group life insurance at work — if the employer pays for it — typically does not contain a suicide clause, Graham says. So if your loved one had free life insurance through work, then the coverage generally will pay a benefit. Contact the employer’s human resources department to learn how to file a claim.

Group life insurance at work — if the employer pays for it — typically does not contain a suicide clause.

However, group life insurance that employees purchase treats suicide much the way individual policies do, excluding it during the first one or two years. If the death occurred during the excluded period, the premiums the employee paid for the coverage would typically be returned to the beneficiary.

You are not alone if you’re dealing with the aftermath of suicide. Among American adults, 55% knew someone who took his or her own life, according to a 2017 poll by Rasmussen Reports, a public opinion polling company. The Centers for Disease Control and Prevention’s data pegs suicide as the 10th leading cause of death in the U.S.

If you’re picking up the pieces after losing someone from suicide, the important thing to remember about life insurance is not to let the cause of death keep you from filing a claim.

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