Does Life Insurance Pay Out for Suicidal Death in the UK?

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By Crispin O'Toole-Bateman

on Thursday 5 September 2019

Person laying flower at a grave

Suicide and life insurance – are you guaranteed a life insurance payout after death in the UK?

Although there is much misconception to the contrary, the reality is that yes, life insurance will pay out in the case of suicide.

The terms and conditions that insurance companies put into their contracts will have an impact, however, so it’s not as simple as that.

Life insurance and the suicide clause

It is devastating to think that someone would take their own life in the belief that their loved ones would be better off without them. Insurance companies have a duty to protect both themselves and vulnerable individuals, and one way in which they do this is to remove the sad temptation that a life insurance payout could present.

Financial difficulties are a significant cause of worry and mental illness in the UK. Statistically, over 100,000 people attempt suicide each year as a consequence of being in severe debt and not knowing how to otherwise get help.

The significant payout a life insurance policy offers could cause someone to try to obtain a policy and then take their own life in order to provide for their family – the suicide clause prevents this terrifying proposition.

The provision states that a period of 12 or 24 months (depending on the insurer) must pass before the policy will pay out in the event of suicide. Note that this doesn’t affect accidental or other death, and it there to prevent suicide only.

Some insurers will pass back any premiums that have been paid if the deceased commits suicide within this waiting period, but the full value of the policy will be denied.

Once the time has passed, the policy will pay out for suicide in full.

Obtaining life insurance with suicidal thoughts – does mental illness affect life insurance?

An application for life insurance includes a portion of questions regarding your mental health. Like any other portion of the application, it is imperative that you answer everything honestly – to do so otherwise is fraud and will void the insurance.

Periods of depression and other mental illness will need to be declared and a previously attempted suicide or suicidal thoughts will have an impact on your life insurance policy – it could cause you to have your application rejected in the first instance but do not worry.

Underwriters are the people who determine the risk for the insurance company and they are authorised to make a personal assessment and pass an application above and beyond the standard situations covered by the basic life insurance application.

At Unite Life, our advisors are trained to be understanding and will treat any application with confidentiality and compassion. They can speak to you about your history and present your case to the underwriters on your behalf.

The underwriter would take into account your treatment and the time that has passed since any previous concern and make a professional assessment.

Life insurance and depression

Depression is considered a pre-existing condition for life insurance purposes and, like other medical conditions, may raise the cost of your premiums.

The underwriter may request a report from your GP detailing your illness and treatment. If you have had treatment for depression or other related mental health condition within the last five years then the insurance company are likely to adjust your premiums accordingly.

Life insurance and substance abuse

Any use of illegal drugs will need to be included in your application and, depending on the level of use, could result in your life insurance policy being rejected or higher premiums.

It is not a black-and-white situation. The longer it has been since your drug use and the class of drug in question play a large part in determining your level of acceptance. For example, semi-regular declared use of marijuana will result in an increase in the cost of your premium but is very unlikely to mean you are rejected.

Habitual use of a Class A drug that led to rehab, however, could be considered irrelevant if it lies in your distant history – a few years past and it will lead to higher premiums, but more than a decade in the distance and it is likely to have little to no effect.

Investigating the death – the contestability period

Like the suicide clause, the contestability clause exists to determine a period during which investigating the death and checking the application for falsehoods and fraud is completely within the rights of the insurer.

Like the suicide clause, it lasts typically for two years, but it can be used to initiate an investigation irrespective of the cause of death.

When does life insurance not pay out?

If the policyholder dies within the contestability period and something comes to light that was not disclosed during the application process, then the insurer may refuse to pay out.

Contestability and suicide

Because both the contestability and suicide periods run at the same time, any death found to be caused by suicide during the period will have the payment rejected.

Due to the nature of the death, a death due to illegal drug overdose is generally considered to be suicide in almost all cases.

Outside the contestability period

Surviving the first two years doesn’t mean there’s no chance of being caught for fraud - if something is discovered to suggest fraud then the insurance company can open an investigation. The difference is that they can’t just investigate as a matter of course once the period is finished.

Contestability period delays

For the beneficiaries, the policyholder dying during the contestability period is likely to mean a delay in payout as the investigation must be concluded before the policy is upheld.

Making a life insurance claim after suicide

The process of making a life insurance claim after this family tragedy is the same as any other time – contact the insurer and let them know the policyholder’s name and policy number for a swift resolution.

Due to the suicide period, some loved ones may deem it unnecessary to contact the insurer if their relative took their own life within the first two years of the policy, but this isn’t true – most insurers will return any premiums paid even though the full payout is void.

Getting the best life insurance with Unite Life

At Unite Life we have an expert team of advisors who can help you through your application even if there has been a history of mental health issues.

We will treat you with professionalism and understanding and talk you through all the options available, so don’t put off making a call through fear of rejection.

To find out more about our range of services, including a complete guide to Critical Illness Cover, fill out our contact form or give us a call today!

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08000 106 194
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