Suicide and Life Insurance

It might not be discussed much during the negotiation of a life insurance policy, but suicide can lead to difficulty between an insurance company and the beneficiary of an insurance payout. In fact the subject of suicide is not mentioned in the conditions of most policies.

But the subject of suicide is constantly brought up in online insurance forums, because this grey area in life insurance is confusing.

Most policies are voided if the policy holder suicides within a fixed time of the policy being written. In most cases this timeframe is one or two years. An insurer would not expect anyone considering suicide to wait two years after taking out a life insurance policy.

There is very little information on the relationship between suicide and life insurance. One study that does open up this area of research is The Trouble with Suicide: Mental Health, Suicide and the Northern Ireland Conflict by Mike Tomlinson. In this study Tomlinson mentions the relationship between suicide and insurance and he states that people with insurance are less likely to commit suicide.

It was found that the suicide rate of the insured was only about a third of the overall rate in the population, probably because the insured earn more and because of insurance screening which results in the insured having better mental health than the population at large – Mike Tomlinson This study, although making assumptions about suicide and life insurance, does bring up the point that a screening process does reduce the risk to the insurer. Another point is brought up in this study about suicide records. Because life insurance can be voided if suicide is the reason for death, a number of suicide cases may not be recorded as such. About 4000 people commit suicide each year in the UK, and this figure does not include the 30 to 50 per cent that most experts agree go unreported. The statistics show that young males are in a higher risk group, but most people who commit suicide have some form of psychiatric illness. Life insurance companies can sometime request psychiatric evaluation of a new policy holder.

About the Author

Simon Harvey is a freelance writer who lives in UK. Rita has worked in the health industry for more than 15 years. Get more information regarding illness and life insurance void life insurance policies.

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