Do Term Life Insurance Policies Pay Out In Case Of Suicide?
Posted May 16, 2009 – 4:21 pm in: term life insuranceNo- I’m not going to do it. Just a question that came up recently.
Tags: Case, Insurance, Life, Policies, Suicide, Term-
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8 Comments
Typically life insurance has a waiting period (in terms of years) to prevent people buying high dollar policies and then killing themselves to help their family (or other beneficiaries). You would have to check the fine print of the policy.
In most policies, whether term or whole life, there is a 2 year suicide exclusion. IF the insured commits suicide within 2 years of when the policy was taken out, no claim will be paid (some companies will cut a cheque for the premiums paid though). Some older policies (like 20 years or older) do not have this clause in it though
After 2 years, there is no suicide clause specifically, but ANY claim, not matter how long into the policy the person is, can be investigated and possibly have the claim denied.
In Australia, there is a 13 month exclusion period where a claim for suicide would not be paid. Usually though the life company refunds the premiums paid, although they are under no obligation to do so.
AFTER the contestable period is up, IF there is no absolute suicide exclusion on the policy, yes it will pay.
The contestable period varies by state – it’s usually two to three years.
Typically yes, but only after a waiting period, usually 2-3 years. This is to prevent suicidal people from purchasing life insurance right before they act.
The answer is, usually, no. Many policies have a ’suicide clause’ which states that they will not pay out if the insured person takes their own life.
There is always – at a minimum – an initial exclusion period.
no