Can your beneficiary collect life insurance benefits after your suicide?

It depends when the suicide has occurred.

Life insurance policies come with a suicide clause, which stipulates that there will be no claims paid when the cause of the claim is suicide and it occurred within a waiting period, usually two years. When the insured commits suicide within the waiting period, the insurance company will just refund the premiums but will not pay the death benefits.

After the requisite two years, the life insurance company is obligated to pay the death benefit no matter the cause of death, including suicide. This is because the waiting period has passed.

The waiting period or the suicide clause is set forth to prevent people who are in dire straits from buying life insurance with the intent to commit suicide. It is assumed that by the time two years have passed, any thoughts about suicide would have been forgotten by the person who bought coverage for himself. This means that if the insured commits suicide after the two-year waiting period, the life insurance company is obligated to pay the death benefits promised.

The mortality rates upon which life insurance companies base their premiums do not consider suicide in their computations. That is why there is a waiting period to discourage those who are thinking about it as a way out of their financial problems. This way, the insurance companies can correctly price their insurance products.

• Why is life insurance important?
• Is group term life insurance coverage affordable?
• How is the term life insurance cost determined?
• How do you compare universal life insurance quotes?
• Should I buy return of premium term life insurance?