Suicide is not a comfortable issue to discuss, but one that needs to be addressed for the sake of our readers that may be impacted by one. This is especially true for the beneficiaries of a life insurance policy taken out on the life of someone recently deceased due to suicide. Depending on the policy, a life insurance claim may easily be denied due to the fact that the policyholder took their own life. From a business standpoint, it makes sense for insurance providers to provide for this denial in their policy documentation as individuals may seek to take out a policy shortly before committing suicide just to set their family up with a large payout upon their sudden departure from this life. As suicide is something that insurance providers cannot control or easily calculate the risk of this occurring, they will seek to exclude this reason for death altogether for policy payouts.
Essentially, insurance providers take the stance that suicide is equal to fraud or misrepresentation in terms of a contract. While the policyholder may not have it in their mind to commit suicide at the time of applying, such a decision goes largely against the timeline for premiums that the original quote was based on. Obviously there are situations where a life can be cut short unexpectedly, but the goal for these insurance providers is to be able to limit their risks based on the applicants life expectancy. The number of premium payouts would hopefully offset the cost of paying out on the policy somewhere down the road, or not at all if the insured outlives the policy term. If the policyholder ends their life sooner than expected, the provider could end up at a loss by a large amount of money.
While the reason for suicide being a denial of claim justification is fairly clear from a business standpoint, the impact of suicide on claims may vary from case to case. As many policyholders are aware that suicide would negate any chance of payout, these policyholders would be more motivated to cover up a suicide if their intentions were to let their family benefit financially from their death. As such, any suspicion of suicide will often lead to further investigation and a claim payout being delayed by the insurance provider.
If you have had a recent life insurance claim either denied or delayed due to a suicide, or suspected suicide, consider reaching out to our firm for assistance on how to proceed. This is especially the case if you believe the cause of death was not suicide and wish to contest the insurance provider’s decision on the claim. In some cases where cause of death is still unknown, it is understandable that the insurance provider may wish to delay the process until a little more information has come forth. However, this approach is not always justified and the appropriate legal representation can help you expedite the process to better suit your financial needs.