Life insurance policies are set up to pay out death benefits should anything happen to the policy holder and the payment proceeds go to the policy’s beneficiaries, who are chosen by the policy holder at the time that he takes out the policy. Suicide, however, is a premeditated death and is not accidental or unplanned, but the person’s family is left in the same dire financial position as they would have been in if he had died another way. Suicide victims’ beneficiaries are therefore no less worthy of receiving the death benefits but the question is whether or not the insurance companies will pay out.
The Suicide Clause
Each life insurance policy will have a Suicide Clause that sets out exactly what will happen in the event of the policy holder’s committing suicide. The fact that a policy holder has committed suicide has an impact on factors like who, if anyone, receives the policy’s anticipated death benefit payment and what happens to the premiums that the policy holder had already paid before he died. Standard suicide clauses take into account exactly when death occurs and a typical clause will state that, if a policy holder commits suicide within two years of taking out the policy, no benefits will be paid under the policy.
Payments To Beneficiaries
Given the above, beneficiaries can expect to receive payment of the policy’s death benefit should the policy holder commit suicide after the expiration of the time period as set out in the Suicide Clause. Should the policy holder commit suicide within this time period, however, beneficiaries will not receive payment of the death benefit but will be refunded all premiums the policy holder had paid before he died.