You buy life insurance because you are seeking financial protection for your loved ones. This seemingly simple, selfless gesture is also a little paradoxical in nature. You pay your monthly (or yearly) premiums, have coverage in place and hope your family will never have to use it. And, if that time comes, you won’t be around when your beneficiary files a claim.
Every life insurance policyholder wants to know that their loved ones will not have to jump through hoops to receive a life insurance payout. Even in a worst-case scenario, like suicide.
We understand your concerns, and we’ll level with you …With suicide, the payout of a life insurance policy can become uncertain. At Haven Life, it’s our mission to get as many people as possible access to affordable life insurance protection. We are not — and do not want to be — in the business of not supporting beneficiaries in their time of need.
Here are the considerations a life insurance company (in Haven Life’s case, our parent company, MassMutual) will weigh after a suicide.
Is the suicide within the contestability period?
Every life insurance policy includes a contestability period, during which the insurer can “contest” any claims made and even decline to pay out the death benefit. The contestability period is generally two years. This helps the life insurance company guard itself against insurance fraud. For example, let’s say someone doesn’t disclose a terminal illness in their application and takes out a $1 million policy knowing they will die well before they’ve paid a fraction of that in premiums. That would be a case where the insurance company would exercise their right to contest the validity of the policy and may not pay out the claim.
Why does it apply here? In short, if a policyholder commits suicide during the contestability period, most insurers will not pay out the claim. This is to prevent someone who is having suicidal thoughts from taking out a policy. Obviously, it’s a tragic situation, and no insurer wants to fall short of expectations. But in these instances, the insurer would refund any premiums paid (to the beneficiaries), and it will be as if the policy had never been taken out.
Are there any exceptions?
No. If an insurer makes an exception, then suddenly the insurer becomes responsible for deciding which situations warrant an exception — and which ones do not.
How does an insurer verify that someone committed suicide?
When a beneficiary files a claim, life insurance companies require a death certificate before paying out the benefit. A death certificate will indicate if the deceased committed suicide, or if they died in an accident where suicide is a possibility (for example, a drug overdose), in which case the insurer might decide to investigate further.
What if a person commits suicide after the contestability period?
Policies will vary by insurer, so we can’t speak to each one specifically. For Haven Term policyholders, in which case coverage is issued by our parent company MassMutual, few claims are denied after the two-year contestability period. (MassMutual paid $5.1 billion in insurance and annuity benefits in 2017 alone.)
Claims are always reviewed on a case-by-case basis, but generally, at this point, death by suicide is covered and eligible for a death benefit payment.
If you have purchased life insurance, you likely have loved ones whom you want to financially protect in the event something were to happen to you. Please don’t leave that up to chance and contracts.
If you’re having thoughts of suicide, call the National Suicide Prevention Lifeline at 1-800-273-8255 (TALK).
Louis Wilson is a freelance writer whose work has appeared in a wide array of publications, both online and in print. He often writes about travel, sports, popular culture, men’s fashion and grooming, and more. He lives in Austin, Texas, where he has developed an unbridled passion for breakfast tacos, with his wife and two children.