Here’s everything you need to know about burial insurance, suicide, and what you can expect from life insurance companies if the cause of death is due to suicide.
Suicide burial insurance does exist, and each policy will cover it after an initial waiting period. All insurance policies have a suicide clause written into their terms and conditions.
This clause states that the company will deny death benefit if the policyholder commits suicide on the first two years of the policy but, some policies may only require a one-year waiting period.
If suicide occurs during the waiting period, the insurance company will only return all premiums paid to the beneficiary, and nothing more.
The suicide clause gives the insurance company the ability to investigate claims during the waiting period and allows them to deny death benefit if you intentionally caused your death.
Burial insurance will cover suicide so long as the policy was purchased at least two years before the policyholder died. There are few exceptions because, after the waiting period, a life insurance policy’s suicide clause expires.
In this article, we’ll cover everything you need to know about burial insurance and suicide to help you understand if the insurance provider will pay the death benefit to your beneficiary when the cause of death is suicide.
WHAT IS SUICIDE?
Suicide is the act of intentionally killing oneself. Most often as a result of mental disorders such as depression, bipolar disorder, personality disorder, schizophrenia, and substance abuse – including alcohol, prescription drugs, and illegal drugs.
According to the American Foundation for Suicide Prevention, there are about 44,965 suicide deaths in the U.S. every year. The Centers for Disease Control and Prevention reports that suicide is the 10th leading cause of death in the U.S today.
WHAT ARE SOME EXAMPLES OF SUICIDE?
- The cause of death is the obvious manner – the insured is clearly responsible for killing himself. For example – hanging, use of pesticide, shooting yourself, jumping off a building, or driving off a cliff.
- Intentionally dying while performing acts with a high probability of death – Example: driving while intoxicated with drugs or alcohol, overdosing on drugs that can cause death, and playing Russian Roulette.
- Dying while committing felonious activity – felonious activities are any acts that constitute a felony such as shooting a police officer who will arrest you or intentionally overdosing on illegal drugs.
BURIAL INSURANCE AND SUICIDE
The suicide clause states that no death benefit will be paid to the beneficiary if the insured commits suicide within a year to two years of taking out a policy (sometimes the waiting period extends to three years depending on the insurance company).
During the waiting period, the insurance companies can investigate claims and deny coverage for intentional death. If the company can demonstrate intentional death or the death was due to suicide, the policy will be denied, and the beneficiaries claim would be denied.
Life insurance companies will pay the death benefit as long as the policy was purchased at least two to three years before the suicide; after the waiting period, the suicide clause expires.
However, a claim will be denied if the insured failed to disclose pertinent information at the time of policy purchase, such as mental illness or risky behavior.
Whenever an insured replaces an existing life insurance policy with a new one, the suicide clause reverts back to zero and starts over again.
If you have two policies and decide to switch to a single policy with a bigger death benefit, even with the same insurance company, your suicide clause and a waiting period will start again.
If you convert your term life insurance into whole life or term life to universal life with the same death benefit amount, your waiting period will not revert to zero.
The contestability clause extends for the first two years of the policy. During this time or waiting period, the insurance company can contest or deny a claim for different reasons. If the company believes you’ve committed suicide during this time, it will investigate the cause of your death, and your beneficiaries may be denied a claim.
The contestability clause allows insurance companies to void coverage if the insured gave inaccurate information in the life insurance application.
For example, you stated that you do not smoke and after a year you died of COPD. Your claim will be rejected if the insurance company proves misrepresentation or fraud in your application.
If the insured died of suicide during the contestability period, the beneficiaries would not receive the full death benefit, but they will be given the sum of all premiums paid.
If the policy has a cash value and the insured borrowed from it, the amount of the policy loan would be deducted from the insurance payout.
Once the contestability period has expired, a claim cannot be contested except in severe cases of fraud or misrepresentation. The incontestability clause kicks in after the contestability period.
Just as with the suicide clause, the waiting period for contestability clause is reset whenever you replace your existing insurance policy with a new one.
IS SUICIDE CLAUSE AND CONTESTABILITY CLAUSE THE SAME?
The suicide clause and contestability clause are not the same (although the period of time is the same). While the period is the same, the contestability clause is broader in scope.
Contestability clause addresses other events that may cause a claim to be denied during the waiting period.
Reasons that may cause a claim to be denied:
- Misrepresentation of information
- Death during an illegal act
- Potential alcohol and drug abuse
Here’s an example of how you will see the suicide clause written on the fine print:
“We will not pay the Net Proceeds if the Insured dies by suicide, while sane or insane, within 2 years from the date coverage is issued. Instead, we will refund all the premiums paid for this policy minus any outstanding policy loans. Any increase in the Face Amount will start the suicide exclusion provision anew but will apply only to the amount of the increase in face amount.”
Here’s an example of how you will see contestability clause written on the fine print:
“We reserve the right to contest the validity of this insurance policy, or the payment of the Death Benefit or any other insurance Policy benefits, if the Insured under this insurance policy have incorrectly stated, misrepresented or failed to disclose a relevant information in the application for insurance, or on the medical exam, or in any written or electronic statements or responses you provided as evidence of insurability.
Except in the case of fraud, we will not contest this insurance policy for misrepresentation after it has been in force for two years during the lifetime of every Insured, from the Coverage Date or the last date of reinstatement. If the Designated Insured dies during this two-year period, we can contest at any time.
When there is an indication of fraud or misrepresentation, we can declare this insurance policy void at any time. Fraud includes but is not limited to any material misrepresentation of the smoking habit of the Insured. If the insurance policy is declared void due to fraud, we will not refund the premiums paid.”
WHY DO INSURANCE COMPANIES PUT A SUICIDE CLAUSE AND CONTESTABILITY CLAUSE?
Life insurance companies include the suicide clause and contestability clause to protect them financially.
The Contestability clause allows the insurance companies to void coverage in some instances, such as if it were given inaccurate information or the insured committed fraud during the insurance application.
The suicide clause protects the company from having to pay claims if the insured intended to kill himself and leave money to their beneficiary.
If the insured’s family is in a desperate financial situation, finding any benefit to end their life may push them to commit suicide. Insurance companies want to minimize this risk by including the suicide clause and contestability clause.
By requiring two years to pass after the purchase of the policy, life insurance companies have a lower risk of having the insured kill themselves to provide for their family.
The two-year waiting period also provides more time for a suicidal policyholder to get the help they need before paying a claim.
DOES BURIAL INSURANCE COVER SUICIDE?
Life insurance companies cover suicide after the first two years or the waiting period. The company will pay for suicide unless there is other exclusion that is specifically outlined in the policy that forbids it.
Insurance companies don’t cover suicide within the first two years of the policy, but they may refund all the premiums paid.
There is insurance coverage if the insured:
- Was insured for an individual policy that went into effect after two years or longer (one year in some states)
- Had free life insurance through work that is paid by the employer
- Purchased coverage through work and it went into effect more than two years ago.
DOES BURIAL INSURANCE COVER DOCTOR-ASSISTED SUICIDE?
Doctor-assisted suicide is also called death with dignity or right-to-die. It involves people who have terminal illness who chose to die than suffer through treatment or diminished quality of life.
Doctor-assisted suicide would also fall under the same suicide clause – death would not be covered during the first two-years of the policy.
After the suicide and contestability period have expired, the company would pay for doctor-assisted suicide. However, you should consult your policy documents to make sure there are no exclusions that would negate your policy.
For example, an illegal activity could prevent your family from receiving the death benefit payout if you died from doctor-assisted suicide if it does not comply with your state regulations.
There are only 7 states, plus Washington, D.C, where doctor-assisted suicide is legal:
- District of Columbia
DOES LIFE INSURANCE COVER ALCOHOL OR DRUG OVERDOSE?
Life insurance may cover alcohol or drug overdose-related death depending on the circumstance of the event and the policy exclusion.
An accidental overdose, in the case where you accidentally took too much of prescribed medication, you will be covered as long as the medication and the condition it treats were disclosed to the company when you apply for coverage.
The insurance company can still contest the claim if it occurs during the suicide clause and the contestability period, but the company should give evidence that your death was intentional.
Death from an illegal drug overdose during the contestability period will be denied even if it’s not considered suicide. The contestability clause also excludes death during illegal acts.
After the suicide and contestability period ends, whether a claim will be paid depends on whether you disclosed drug use and treatment in your application.
Alcohol-related deaths are similar to drug use. If you failed to disclose your history of alcohol abuse and treatment on your application, the claim may be denied.
And if the insurance company were able to find evidence that you intentionally kill yourself during the waiting period, they would be able to reject your beneficiary’s claim.
BURIAL INSURANCE AND DEPRESSION
During the underwriting process, life insurance companies will look at the applicant’s health and health history to determine how risky he or she will be to insure.
They will also review how likely the applicant will die prematurely during the course of the policy. They also look not only on physical health but mental health as well.
Depression is a risk factor of suicide, and this condition should be disclosed during the application. Insurance policies with health questions may ask about when you were first diagnosed with depression and its severity.
You may also be asked to disclose treatment and medication you use to qualify for coverage.
Mental illness and life insurance can be complicated. You can get the best rates for burial insurance depression by disclosing your mental health history, if not your death benefit may be denied to your beneficiaries during the contestability period.
Each application and medical condition will be looked at on a case to case basis.
SUICIDE AND NO WAITING PERIOD LIFE INSURANCE POLICY
There are some life insurance policies with “no waiting period” before full death benefits are available. You can get immediate coverage life insurance policy without a medical exam.
However, these policies still have a suicide clause and contestability period where the insured can deny coverage for suicide and non-disclosure of mental illness.
It is important to note that the suicide clause is beneficial to both the policyholder and the insurance company. Someone who is contemplating suicide but wants to provide for his or her family may take out a large life insurance policy.
But, the suicide clause may need him or her to live for two years…this is long enough for his fortune to improve or to get the help he or she needs for his depression and despair.
WHAT TO DO IF YOUR CLAIM WAS DENIED
Insurance companies may contest a life insurance claim if they believe the insured died from suicide during the suicide clause waiting period.
They will typically put off giving a claim until law enforcement or medical examiner rule how the insured died, but in most cases, they will conduct their investigation.
In these cases, the life insurance company will look for:
- The death certificate
- Hospital reports
- Autopsy report
- The insured’s medical history, including records of psychiatric care and medications
- Anything that could be considered a suicide note
- Any evidence of drug or alcohol abuse or illegal behavior
- Testimony from family, friends or witnesses
- Weapons Purchases
The insurance company needs to provide proofs to demonstrate the insured died due to suicide. The company can deny payment and beneficiaries must contest the claim denial to receive a death benefit.
If your insurance claim was denied and you believe the company’s reason to be incorrect, you may need to bring legal action to receive a payout. You must contest the life insurance company’s decision to receive a settlement.
If you still disagree with the company’s decision to deny a claim due to suicide, you will need to consult your state’s laws. Many states have protection in place for the beneficiaries.
HOW CAN FUNERAL FUNDS HELP ME?
Trying to find a policy if you have a history of suicide needn’t be a frustrating process; working with an independent agency like Funeral Funds will make the process easier and quicker.
If you have a health history of depression and suicide, let us help you; we will work with you side by side to find a plan that fits your needs.
We will work with you every step of the way to find the plan that fits your financial requirements and budget. You don’t have to waste your precious time anymore searching for multiple insurance companies because we will do the dirty work for you.
We will shop your case to different insurance carriers and get you the best price.
We work with many A+ rated insurance carriers that specialized in covering high-risk clients like you. We will search all those companies to get the best rate. We will match you up with the best burial insurance company that gives the best rate.
We will assist you in securing the coverage you need at a rate you can afford. So, if you are looking for suicide funeral insurance, or suicide burial insurance, or suicide life insurance. Fill out our quote form on this page or call us at 888) 862-9456 and we can give you an accurate quote.