does life insurance cover suicide? How is suicide handled in a life insurance policy? Suicide is defined in the dictionary as “the act of killing oneself intentionally.” This, unfortunately, is not an uncommon thing in modern-day America because people live under huge stress, and it is hard to deal with the issues of everyday life. Unfortunately for some people, they are so compelled by the problems in the world and troubles that they are experiencing; that they decide to take their own lives to stop living in this world. It is an unfortunate and compelling situation that, in most cases, can be prevented, but that most people fail to identify the causes for.
It is essential to mention that in the United States, the gender group that attempts the most suicides is the females; however, they are not the gender with the highest suicide rates. Although females try to kill themselves more than males, males die more every year because of suicide. Experts say that this is because males are more violent, and when they decide to take their own lives, they do so convincingly. A woman might try to kill herself by taking many pills, while a man might turn to a gun to commit the act. In the year 2002, as estimated by the World Health Organization, there were approximately 31,595 suicides in the United States, and with such high numbers, one can only imagine the significance of those numbers in the medical and insurance industry.
When speaking of life insurance, it is hard for someone to imagine the word suicide. After all, a person insures oneself to take the risk of the economic burden away from their loved ones after you die “unexpectedly.” Each life insurance company handles its policies differently, and for this reason, it is essential to check with each one of them what would happen after a person decides to kill themselves and does not think of his family, loved ones, and significant others. If a company does not specify anything about suicide within their contracts, then more than likely, they will have to pay the beneficiary for the amount covered in the policy. If the insurance policy is a term one, then they will have to pay the total amount the policyholder chose to purchase at the time of the contract signing. On the other hand, if the policy is a permanent one, then the beneficiary will get a death benefit equal to the cash value (or savings portion) of the policy. There are some policies out there that have a minimum in death benefit; if that is the case and if there is nothing about suicide in the contract, then the beneficiary will be given the amount that minimum death benefit equals to.
On the other hand, many life insurance policies have now started to prepare for the suicide rates in the entire United States. It is impossible to predict when a person will commit such a horrible thing, and because even the nicest person can go into depression and attempt to kill themselves, life insurance companies have started what is called the “suicide provision” in their contracts. This provision states that if a person commits suicide within the first two years from the policy’s date, then the beneficiary in the policy will not be allowed to have any money whatsoever. What happens if the policyholder decides to kill himself or herself after those two years have passed through? The answer to this question is the same one we discussed in the last paragraph; the beneficiary will be given the money depending on what type of policy the insured had before his or her death. Why is there only a two-year period though? The reason for this is that insurance companies have been trying to prevent people from just buying their products with the simple idea of just killing themselves so that their families get out of a financial burden.
They back their claim up, stating that statistics lets them see that if a person is planning on taking their life, they will not wait for a clause to achieve what they want. Another significant change that can take place in the future is a person that has a religion for which they would die for their cause. Because some individuals have started to join life insurance policies around the world for the fact that they will attempt a suicide mission in the future and to fund their cause, insurance companies are starting to look in other directions to avoid this from happening. It is still very early to predict what life insurance companies will do in the next few years toward suicide in their policies; we do now, however, and that whatever they do will be to save themselves money and risk.