Life Insurance That Covers Suicide

Life insurance is a type of insurance that provides financial security to your loved ones in the event of your unexpected death. It helps them to pay off your debts and cover the expenses of your funeral. However, there is a common misconception that life insurance does not pay out if the policyholder dies by suicide. In this article, we will explore life insurance that covers suicide and how it works.

What is Life Insurance That Covers Suicide?

Life insurance that covers suicide is a type of policy that pays out a death benefit to the beneficiaries of the policyholder if they die by suicide, provided that certain conditions are met. These conditions vary from one insurer to another, but generally, the policy must have been in force for a certain period of time before the suicide occurs.

The reason why some life insurance policies do not cover suicide is that it is considered a high-risk behavior that could potentially be planned in advance to collect the death benefit. However, some insurers understand that suicide can be the result of mental illness, which is why they offer policies that cover it.

How Does Life Insurance That Covers Suicide Work?

Life insurance that covers suicide works like any other life insurance policy. The policyholder pays a monthly or annual premium to the insurer in exchange for coverage. If the policyholder dies by suicide, the beneficiaries of the policy will receive a death benefit, which is a lump sum payment that is tax-free.

However, as previously mentioned, the policy must have been in force for a certain period of time before the suicide occurs. This is called the suicide clause, and it varies from one insurer to another. Typically, the suicide clause is two years from the date the policy was issued. If the policyholder dies by suicide within this period, the insurer may refuse to pay out the death benefit.

Types of Life Insurance That Cover Suicide

There are several types of life insurance that cover suicide, including:

FAQ About Life Insurance That Covers Suicide

Why do some life insurance policies not cover suicide?

Some life insurance policies do not cover suicide because it is considered a high-risk behavior that could potentially be planned in advance to collect the death benefit. However, some insurers understand that suicide can be the result of mental illness, which is why they offer policies that cover it.

What is the suicide clause?

The suicide clause is a period of time during which the life insurance policy will not pay out the death benefit if the policyholder dies by suicide. The suicide clause varies from one insurer to another but is usually two years from the date the policy was issued.

Can I get life insurance that covers suicide if I have a history of mental illness?

It depends on the insurer and your specific circumstances. Some insurers may offer coverage to individuals with a history of mental illness, while others may not. It is best to shop around and compare policies from different insurers to find the one that best suits your needs.

Is the death benefit taxable?

The death benefit is generally not taxable, which means that your beneficiaries will receive the full amount of the death benefit specified in the policy.

How much does life insurance that covers suicide cost?

The cost of life insurance that covers suicide varies depending on several factors, including your age, health, and the type of policy you choose. Generally, term life insurance is less expensive than whole or universal life insurance.

Conclusion

Life insurance that covers suicide is a type of policy that pays out a death benefit to the beneficiaries of the policyholder if they die by suicide, provided that certain conditions are met. The suicide clause is a period of time during which the policy will not pay out the death benefit if the policyholder dies by suicide. It is important to shop around and compare policies from different insurers to find the one that best suits your needs and budget.