Insurance payout in event of a suicide

Tax_Slave

A distant relative of my wife who was male aged 60 recently committed suicide.

Someone in his family said he didn’t have any life insurance and if he did they would not have paid out. However they added he had a mortgage with his wife.

I always thought insurance didn’t pay out in the event of a suicide and asked ChatGPT that answered giving the impression it did!

Surely this can’t be correct?

Yes we have empathy for his family, but they are remotely related and we last saw them at a wedding some 20 years ago.

HappyHarry

Usually life policies will pay out on suicide providing that:

1. The policy has been in place for at least a year and
2. Suicide is not mentioned as an exclusion on the individual”s policy.

dunstonh

I always thought insurance didn’t pay out in the event of a suicide and asked ChatGPT that answered giving the impression it did!

Surely this can’t be correct?

The myth of not paying out on suicide is an Americanism. Often seen in TV shows that were based on an American script. Over there, suicide is not covered on many policies or has a much longer qualifying period. In the UK it is covered on the basis HH mentions above.

Some over plans apply a longer period to qualify for suicide.

The most common reason for suicides not to result in a payout is non-disclosure of pre-existing mental health issues.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6660100/insurance-payout-in-event-of-a-suicide

It depends on what class of insurance, as others have mentioned on Life insurance its normally only excluded in the first year unless you had pre-existing mental health issues then an extra exclusion would have been added and you'd have known about it.

Ex used to do PPI and MPPI claims, their policy did have a self harm exclusion and so in principle wouldnt have paid out on suicide but the reality was that if you were "successful" then the claim would be paid. If you attempted suicide, didnt succeed but were off work due to your injuries etc then they wouldnt payout and stick to the self harm exclusion.

It can get into murky territory though with some scenarios not being abundantly clear if it was attempted suicide or misadventure.

vacheron

Our company death in service policy also pays out in the event of suicide. This came as quite a surprise to us when someone mentioned it a few years ago, but from the above replies it is perhaps not as unusual as we initially thought.

Weighty1

They treat suicide as a mental health claim causing someone's death, similar to how most causes of death are due to their physical health.

The exclusion is in place to stop people taking out a plan and then doing away with themselves and if they were so depressed that they killed themselves within the first 12-months a plan was in place then there's a good chance they could have been experiencing severe depression before taking the plan out but simply not disclosing it.

It nearly always surprises people that suicide is covered but really shouldn't when you think about it.

marcia_

I obtained insurance, at a higher cost, declaring mental health conditions and suicidal ideation. My insurance just said it was excluded for 1 year.