Life Insurance and Suicide

Life insurance is purchased for a variety of reasons and used after death to help with final expenses, pay off a mortgage, to leave extra money to family or a charity and whatever else you can think of.  Sometimes, people have suicide in their mind when deciding to purchase life insurance.

Perhaps the individual who has thoughts of suicide wants to leave more money to educate children, provide extra living expenses or to pay off a business obligation.  The reason may only be known to that individual.

Purchasing life insurance products with the intent of suicide in mind is a reality.  Life insurance companies are aware of this and for many years have included a two year suicide clause in their life insurance policies.  If an individual dies by suicide within two years of purchasing a life insurance product the life insurance company will in most cases, not pay the beneficiaries any money.

When looking at life insurance, this can also include the policies that are offered to you when you are initially purchasing a home, car, boat or any other item and receiving a loan from a local bank or credit union.

There are and have been exceptions to this rule after someone has completed a suicide death, but it is not the norm and is not something to count on.  I often wonder if someone higher up in the ranks has a soft spot that day and says let it go through; pay the policy amount to this family.

Consider for a moment the ramifications of someone who intended to leave money for their family and did not understand or know about the 2 year clause on suicide death.  The death occurs; the family is devastated and there is no additional money.

Another scenario to contemplate is when someone decides to purchase life insurance for their survivors to use after a suicide death.  The inevitable ending has been thought through, to some degree a number of years in advance.  The suicide death occurs; the family is devastated and there is additional money.

Both scenarios are tragic. Both scenarios leave a trail of traumatized family due to the sudden and unexpected death of someone who is loved. Money may be the last of their concerns when family, friends and coworkers are suffering with unanswered questions, anguish and deep despair.

I do understand the intent behind someone purchasing a life insurance policy before deciding to die by suicide, but money is not everything to everyone.  No one can be replaced.