Life Insurance And Suicide In Florida: What's Covered?

Life insurance policies typically include a suicide clause that prevents the insurer from paying out the claim if the insured's death was due to self-inflicted injury within a certain period, usually two years, from the start of the policy. This clause is meant to prevent individuals from purchasing a policy with the intention of taking their own lives so that their loved ones can receive financial benefits. After this exclusion period, most life insurance policies do cover suicide, and beneficiaries are entitled to receive the full death benefit. However, it's important to note that different types of life insurance policies may have specific clauses and conditions that impact coverage in these circumstances.

Life insurance suicide clauses

Life insurance policies typically include a suicide clause, which is active for a certain period after the policy goes into effect. This period can last from one to three years, depending on the insurer and state regulations, but it's typically two years.

The suicide clause is designed to prevent someone from purchasing a policy and then taking their own life soon after so that their loved ones can receive financial benefits. During this exclusion period, if the policyholder dies by suicide, the insurer may limit or deny the death benefit payout. Instead, they might refund the premiums paid up to that point. Once the exclusion period ends, the life insurance policy generally covers suicide, and beneficiaries will receive the full death benefit.

It's important to note that changing a policy, such as by adding coverage or converting a term policy into a whole life policy, can reset the clock, and the exclusion period will start over.

Group life insurance policies, often provided by employers, usually include similar suicide clauses to those found in individual life insurance policies. However, some group life policies, such as those offered by Veterans' Group Life Insurance (VGLI) and Servicemembers' Group Life Insurance (SGLI), do not have a suicide clause, and will pay out the death benefit regardless of the cause of death.

In the case of individual term life insurance, beneficiaries can claim the death benefit as long as the exclusion period has ended. If the person dies after the policy has been in effect for one to two years, the beneficiaries are entitled to the full benefit. But if the person dies during the exclusion period, the beneficiaries might only receive the sum of the premiums paid to date.

With whole life insurance policies, the beneficiaries might receive the plan's cash value even if the covered person dies during the exclusion period. When the exclusion period ends, the beneficiaries can receive the full death benefit and cash value.

Life insurance payouts for suicide

Policy Provisions for Suicide

Life insurance policies typically include a "suicide clause" or "suicide provision," which states that the insurer will not pay out the claim if the insured's death is due to suicide within a specified period from the start of the policy. This period is known as the exclusion period and usually lasts for one to three years, with two years being the most common duration. The purpose of this clause is to prevent individuals from purchasing life insurance with the intention of committing suicide soon after to provide financial benefits to their loved ones.

Life Insurance Payouts After the Exclusion Period

If the suicide occurs after the exclusion period has ended, the life insurance policy will typically pay out the death benefit to the beneficiaries. This means that if the insured person dies by suicide more than two years after purchasing the policy, the beneficiaries will receive the financial benefits outlined in the policy.

Life Insurance Payouts During the Exclusion Period

During the exclusion period, life insurance companies may deny the death benefit payout if the insured's death is due to suicide. However, in some cases, the beneficiaries may still receive a refund of the premiums paid into the policy up to that point. Additionally, if the policy has built up cash value, such as in a whole life insurance policy, the beneficiaries may receive a portion of that value, depending on the specific terms of the policy.

Group and Military Life Insurance Policies

It is important to note that group life insurance policies, often obtained through an employer, and military life insurance policies do not usually include a suicide clause. Therefore, these policies typically pay out the death benefit to beneficiaries regardless of when the insured person obtained the policy or the cause of death, including suicide.

Steps to Take After a Denial of Claim

If your life insurance claim is denied due to suicide during the exclusion period, there are steps you can take to challenge the decision. First, carefully review the insurer's denial letter and gather relevant documentation, such as medical records and investigative reports. Understand your rights under state laws, as some states offer specific protections or recourse in these situations. Then, contact the insurance company and initiate the appeals process, providing all the necessary information and supporting documents. If needed, consider consulting with an experienced attorney or insurance professional to help you secure the benefits owed to you.

Denial of a life insurance claim

If a life insurance claim is denied, it is important to understand the insurer's reasoning and know what steps can be taken to challenge their decision. Denials typically occur if the death falls within the policy's suicide exclusion period, which can range from one to three years, depending on the insurer and state regulations.

To contest a denial, the following steps can be taken:

Step 1: Wait for the Insurance Company's Decision

After the insured party's death, the insurance company must determine the cause of death. If they decide that you are not entitled to a payout, they will send a denial letter.

Step 2: Review the Insurance Policy and Application

Check if the insured misrepresented themselves in any way. For example, insurance companies will not pay out if a smoker claims to be a non-smoker to obtain cheaper insurance premiums.

Step 3: Check State Laws

See if your state has protections for beneficiaries against insurance companies to determine if the denial meets state rules.

Step 4: Contact the Insurance Company

Get in touch with the insurance company to discuss the denial and explore your options. Make sure to have all relevant information to prevent delays, including the insurance application, policy, proof of premium payments, death certificate, and any other supporting documents needed to support your claim.

Step 5: Consult an Attorney

If the appeal is unsuccessful, consulting with an attorney experienced in insurance claims may be advisable. They can help you understand your rights and determine if the denial was unjustified.

It is important to note that different types of life insurance policies may have specific clauses and conditions that impact coverage in these circumstances. For example, military life insurance policies and group life insurance policies often do not include a suicide clause, so they typically pay out the death benefit regardless of the cause of death.

Getting life insurance with a history of attempted suicide

Life insurance policies typically include a suicide clause that prevents the insurer from paying out the claim if the insured's death was due to self-inflicted injury within a certain period from the start of the policy. This period is usually two years but can range from one to three years. The clause is meant to prevent someone from purchasing a policy with the intention of taking their own life so that their loved ones can receive financial benefits.

If you have a history of attempted suicide, getting life insurance coverage can be more difficult, but it's not impossible. Here are some things to keep in mind when seeking life insurance with a history of attempted suicide:

• Table Ratings: Insurers may apply extra costs to your standard premium based on their assessment of your risk. A higher table rating means higher premiums, reflecting the increased risk the insurer perceives due to your history.
• Flat Extras: These are specific dollar amounts added to your premium to account for the insurer's perceived risk of insuring someone with a history of attempted suicide. Flat extras can be permanent or temporary.
• Time Since the Attempt: The more time that has passed since your suicide attempt, the better your chances of getting coverage. Insurers look for stability in your mental health over several years.
• Current Mental Health Status: If you've been stable and treatment-free for a period, this can positively influence the insurer's decision.
• Specialized Insurers: Working with an insurance professional who specializes in high-risk cases can improve your chances of finding coverage.

It's important to be transparent about your mental health history when applying for life insurance. Nondisclosure or misrepresentation on your application could result in the cancellation of your policy or denial of benefits to your beneficiaries.

If you're struggling with mental health issues or having suicidal thoughts, it's crucial to seek help. Resources are available, such as the National Suicide Prevention Lifeline, which offers a 24/7 hotline at 1-800-273-8255.

Contestability clauses

A contestability period is a short window, typically two years, during which insurance companies can investigate and deny death claims. This period begins when a policy becomes active and only applies when policyholders have lied on their life insurance application. While the contestability period is when insurers are most likely to investigate a death claim, they can investigate any claim at any time if there are signs of fraud.

During the contestability period, the insurance company can review and potentially deny a claim if they find that the policyholder misrepresented or omitted important information on their application. This includes undisclosed health conditions or other discrepancies. For example, if a policyholder did not disclose that they were a smoker and died from COPD within the contestability period, the insurance company could investigate and deny the claim.

The contestability period is separate from the suicide clause and protects the insurance company from fraud, ensuring customers get the best plan for their health and lifestyle. It is beneficial for policyholders to be aware of this clause as it directly affects whether beneficiaries will receive financial support.

After the contestability period ends, the life insurance policy generally covers suicide, and the insurer is required to pay the full death benefit. This is known as the incontestability clause, which means the insurer can no longer deny a claim based on errors or omissions in the application, except in certain cases of fraud.

Frequently asked questions