If a Person Commits Suicide, Can the Family Collect Insurance?

Life insurance provides a financial safeguard, offering a death benefit to designated beneficiaries upon the policyholder’s passing. This protection helps families manage expenses and maintain their standard of living during difficult times. Understanding how these policies function, especially under sensitive circumstances, ensures intended support reaches those it is meant for.

Life Insurance and Suicide Provisions

Most life insurance policies include a “suicide clause,” which addresses situations where the policyholder dies by suicide. This clause is active for a specific period after the policy is issued, most commonly for the first one to two years. Its purpose is to protect insurance companies from individuals who might purchase a policy with the immediate intent of ending their life to provide financial benefits to their loved ones.

If a policyholder dies by suicide within this exclusion period, the death benefit is not paid out to the beneficiaries. Instead, the insurance company refunds the premiums paid for the policy, minus any outstanding loans or unpaid premiums. If the policyholder’s death by suicide occurs after this one-to-two-year exclusion period, the life insurance policy covers the death, and the full death benefit is paid to the beneficiaries, similar to any other covered cause of death. This distinction balances the insurer’s risk management with the policy’s protective purpose.

Initiating a Life Insurance Claim

Initiating a life insurance claim involves a structured process to ensure beneficiaries receive the death benefit. The first step is notifying the insurance company of the policyholder’s death. This can be done by contacting the insurer directly, working with the insurance agent, or reaching out to the deceased’s financial advisor.

Beneficiaries need to obtain a certified copy of the death certificate. It is advisable to request several certified copies, as various institutions may require them. After notification, the insurance company will provide the necessary claim forms, requesting personal information about the deceased, the beneficiary’s relationship, and preferred payout method. Completing these forms accurately and submitting them with the certified death certificate and policy number helps expedite the claim review process.

Addressing Claim Outcomes

After a life insurance claim is submitted, the insurance company reviews documentation to determine coverage and process the payout. If approved, the death benefit is paid out to the beneficiaries. Payouts are made as a lump sum, providing immediate financial support, though other settlement options like installments may be available depending on the insurer. Insurers process claims within 30 days of receiving all required paperwork, though some cases might take longer.

Life insurance claims can be denied for various reasons, including a lapsed policy due to unpaid premiums, misrepresentation on the application, or if the death falls under a specific policy exclusion, such as suicide within the exclusion period. If a claim is denied, the insurance company is required to send a letter outlining the reasons for denial. Beneficiaries can appeal by reviewing the denial letter, gathering supporting documentation, and submitting an appeal to the insurer. If the appeal is unsuccessful, options include contacting the state’s department of insurance or seeking legal counsel specializing in insurance claims.