Does life insurance cover suicide?

Sadly, mental health conditions and suicide are prevalent in Australia, and as such, a common question asked is whether you can be covered by insurance if you suffer from these types of illnesses. There are strict stipulations as to when suicidal death is covered by insurance, and we go through them here.

Does life insurance cover suicidal death?

Most life insurers offer some form of cover if the life insured (the person who is covered by the policy) dies by suicide. However, there is usually a 13-month exclusion period after the policy is first taken out where cover will not apply in the event of suicide.

What does this mean?

The 13-month exclusion period is widely used across the life insurance market, and is used to discourage people from taking out life insurance and then committing suicide soon after, for the purposes of receiving a payout for their loved ones.

This means that if the life insured passes away due to an act of intentional self-harm during that period, their life insurance is in effect voided and there will be no payout to their nominated beneficiaries.

You may notice that some insurers avoid using the term "suicide" and instead use terminology along the lines of "intentional self-harm" or "intentional-acts".

Can mental illness affect your insurance cover?

Many Australians have had some experience with mental health. It could personally affect their lives or the lives of someone they know. So it's reasonable to wonder how mental illness might impact insurance.

It's always important to disclose any conditions that could impact your insurance coverage. This includes any mental health conditions that you might suffer from, no matter how minor. Not only is this important for your future ability to claim, but it's also part of your duty of disclosure. Not to do so could be considered fraud and have far-reaching implications in the future.

After you have disclosed your conditions, your insurer will assess them and decide whether they will still offer cover. They may add an exclusion to your policy, meaning that you won't be able to claim for that particular condition. Or, they may increase your premium in accordance with the increased risk of you making a claim due to that illness.

Insurers will always assess medical histories on a case-by-case basis. They will take into consideration the seriousness of your illness, any self-harm attempts and how well managed that illness now is. You can always apply at a later date to have your medical history reviewed as well.

Suicide rates in Australia

Suicide is a serious health problem in Australia, accounting for more than 3,000 deaths every year. It's the leading cause of death for 15-to-44-year-olds and males are three times more likely to die by suicide than females. In 2018, the age-specific rate for males was 18.7 per 100,000 (2,320 deaths by suicide), and for females it was 5.8 per 100,000 (726 deaths by suicide). That makes it the 10th leading cause of death for males and the 23rd for females.

Suicides are most common among young and middle-aged people, accounting for over 38.4% of deaths among people between the ages of 15 and 24, and 29.4% among those aged 25 to 34.

Between 2017 and 2018, every state and territory in Australia recorded decreases in the number of registered deaths due to suicide. NSW had the highest numbers of suicides, accounting for 29.5% of all deaths by suicide in the country.

Groups most at risk of suicide include Aboriginals and Torres Strait Islanders. A number of factors are responsible for this, including racism, colonisation, dispossession and past policies of exclusion and child removal, which have also contributed to a number of social and economic disadvantages.

For those in need of assistance, there are a number of resources available including:

• Lifeline
• Beyond Blue
• Black Dog Institute
• Life in Mind Australia
• Everymind

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