Life insurance generally does not pay out if the insured commits suicide within the policy's contestability period, usually the first two years; after that period, most policies will cover suicide as a cause of death. The payout then follows the same rules as any other claim, subject to the policy's terms and any exclusions.
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Contestability Period and Suicide Clause
Most insurers include a suicide clause that voids benefits if the insured dies by suicide within a set time after the policy starts, commonly two years. This protects insurers from immediate claims after a new policy is issued.
Coverage After the Contestability Period
Once the contestability period expires, suicide is treated like any other cause of death, and the death benefit is payable to the designated beneficiaries, provided the policy is active and premiums are current.
Exceptions and State Laws
Some states have statutes that limit or modify the enforceability of suicide exclusions, and certain policies—such as accidental death riders—may have separate provisions. Reviewing the specific policy language and local regulations is essential.
Impact on Beneficiaries
Beneficiaries receive the lump‑sum benefit without tax on the principal, though any interest earned may be taxable. The claim process is the same as for natural causes, requiring a death certificate and proof of identity.
Key Policy Features to Check
- Length of the contestability period
- Exact wording of the suicide exclusion
- State-specific consumer protections
- Any riders that modify standard coverage