Jane Dotson
Life insurance is a valuable tool that helps protect your loved ones after you pass away. TruStage™ offers a range of insurance products to meet diverse needs, including whole life insurance. While life insurance typically pays out a death benefit to beneficiaries, there are specific—and avoidable—reasons why claims are denied. Suicide is often listed as an exclusion, and most policies contain a suicide clause that states the insurance company does not have to pay the claim if the insured person dies by suicide within a given period, usually one to two years from the policy's start date.
| Characteristics | Values |
|---|---|
| Whether Trustage life insurance covers suicide | Depends on the policy |
| Typical suicide exclusion period | 1-2 years |
| What happens if the insured person dies by suicide during the exclusion period | The beneficiary gets the money the policyholder paid into the insurance policy |
What You'll Learn
TruStage life insurance policies include an incontestability clause
Life insurance is a valuable tool designed to help protect your loved ones after you pass away. TruStage™ is underwritten by CMFG Life Insurance Company, which has been consistently rated 'A' (Excellent) for financial stability by AM Best. TruStage™ insurance offers ongoing support, no medical exams, and no red tape. They work with you to select a policy that's right for your budget.
When it comes to suicide, it's clear that no one should benefit financially from the tragic loss of a loved one's life. Many life insurance policies include clauses that discourage a person from taking out a policy with the sole intention of ending their life for the financial benefit of their beneficiaries. These include the incontestability clause and a specific suicide exclusion clause.
The incontestability clause covers more than just suicide and is the main reason an insurance company might deny a claim following a suicide. This clause allows the life insurance company to deny a claim during the "contestability period", usually two years following the date the insurance policy's coverage begins. After this contestability period passes, a life insurance claim becomes incontestable and cannot be denied except for serious issues like fraud or misrepresentation.
Therefore, it is important to understand that when buying a new life insurance policy or changing insurance companies, these actions could reset the clock on contestability and suicide exclusions. TruStage™ Insurance agents are available to help clarify any questions regarding their policies.
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There is a specific suicide exclusion clause
The suicide exclusion clause is often accompanied by an incontestability clause, which allows the insurance company to deny a claim during the "contestability period", typically the first two years of the policy. After this period, the claim becomes incontestable unless there are serious issues such as fraud or misrepresentation.
It is important to note that the time period for the suicide exclusion clause may vary by state law and can be as short as one year. Additionally, replacing existing coverage or changing insurance companies could reset the clock on these clauses. Therefore, it is crucial to carefully read all the documents and seek help from a licensed expert if needed.
While the presence of a suicide exclusion clause may be concerning to some, it is important to understand the purpose behind it. Insurance companies aim to protect people and businesses from unforeseen events rather than pay benefits for planned events. By including this clause, insurance companies ensure that they are not creating a financial incentive for suicide and protecting their customers from potential harm.
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The suicide exclusion clause is dependent on state law
The suicide exclusion clause in life insurance policies is dependent on state law. In most states, the exclusion period is two years, but it can vary. For instance, in Colorado, Missouri, and North Dakota, the exclusion period is shorter, and beneficiaries can claim death benefits after the policy has been in force for a year.
The suicide exclusion clause is a standard clause in life insurance policies that limits payments made to survivors of a policyholder who dies by suicide within a certain period after purchasing the policy. Insurance companies typically don’t pay a death benefit if the covered person dies by suicide within the first two years of coverage, which is commonly known as the exclusion period.
The clause is intended to protect the insurance company from financial risk by preventing an individual from taking out a policy with the intention of ending their life shortly afterward. The exact duration of the suicide clause can vary depending on the insurer and state regulations. It's beneficial for policyholders to be aware of this clause as it directly impacts whether their beneficiaries will receive the intended financial support.
After the exclusion period ends, the life insurance policy generally covers suicide, and the beneficiaries will receive the full death benefit as outlined in the policy. If a policy does not include a suicide exclusion clause, the insurance company is required to pay the full death benefit if the insured dies by suicide, whether premeditated or not.
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The policy must be in place for longer than two years
When it comes to life insurance policies and suicide, it's important to understand the specific clauses and conditions that apply. While the topic of suicide is a sensitive and tragic issue, it's crucial to recognize that insurance companies exist to protect people from unforeseen events and not to incentivize or encourage planned events.
In the context of life insurance, the "incontestability clause" and the "suicide exclusion" are two crucial clauses that come into play. The incontestability clause covers various situations, including suicide, and it allows the insurance company to deny a claim during the "contestability period," which is typically the first two years after the policy's coverage begins. This means that if a policy is less than two years old and a claim is made due to suicide, the insurance company has the right to deny the claim under this clause.
The suicide exclusion is another important clause to consider. This clause specifically addresses suicide and states that the insurance company is not obligated to pay the full death benefit if the policyholder dies by suicide within a certain time frame, usually one to two years from the date the policy takes effect. If the policyholder dies by suicide before this period ends, the beneficiary will receive only the money the policyholder paid into the policy, not the full death benefit.
Therefore, when considering life insurance and suicide, it's essential to understand how long the policy has been in place. If the policy has been in effect for longer than two years, the contestability period for the incontestability clause and the suicide exclusion would have passed. In such cases, the insurance claim would be less likely to be denied based on these specific clauses.
However, it's important to remember that insurance companies can still investigate and deny a claim if there is a case of fraud or misrepresentation, such as knowingly providing false information about health history or previous mental health issues. Additionally, replacing existing coverage or changing insurance companies could reset the clock on contestability and suicide exclusions, so it's crucial to carefully review all documents and seek expert advice when purchasing or modifying a life insurance policy.
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The incontestability clause covers more than just suicide
An insurance policy's incontestability clause covers more than just suicide. This clause is the main reason an insurance company might deny a claim following a suicide. The incontestability clause allows the life insurance company to deny a claim during the contestability period, which is usually two years following the date the insurance policy's coverage begins.
Once the contestability period passes, a life insurance claim becomes incontestable, meaning it cannot be denied except for serious issues like fraud or misrepresentation. This is different from the suicide exclusion clause, which excludes death benefits if the policyholder's death is the result of suicide within a limited period, typically two years after the policy's coverage becomes effective.
The incontestability clause is a key provision that activates after a life insurance policy has been in force for a specific period, usually two years. After this period, the insurer cannot deny a claim based on errors or omissions in the application, except in cases of fraud. This clause ensures that policyholders and their beneficiaries have added security, knowing that their coverage cannot be easily contested after the initial period.
While the suicide clause specifically addresses the circumstances of the policyholder's death, the incontestability clause focuses on the accuracy of the information provided when the policy was purchased. It is important to note that when buying a new life insurance policy or changing insurance companies, these actions could reset the clock on contestability and suicide exclusions. Therefore, it is crucial to carefully review all the documents and seek help from a licensed expert if needed when purchasing any life insurance policy.
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Frequently asked questions
It depends. If the policy is less than two years old, it’s possible the claim could be denied under either the policy’s incontestable clause or the suicide exclusion. If the policy is older than two years, the claim will likely be approved.
The suicide exclusion is a clause in a life insurance policy that excludes death benefits if the policyholder dies by suicide within a limited period of time, usually two years from the date the policy goes into effect.
The incontestability clause allows the life insurance company to deny a claim during the "contestability period", which is usually the first two years of the policy. After this period, a life insurance claim becomes incontestable unless there is fraud or misrepresentation.
