Does life insurance cover suicide?
Yes, life insurance can cover suicide, but there are a couple exclusions you need to know about.
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There's nothing more heartbreaking than losing a loved one, particularly to suicide. Sadly, it's an all too common cause of death — approximately eight people die from suicide a day in Australia, according to the Australian Institute of Health and Welfare. Life insurance can't change that but it can at least ease the financial burden of losing someone. It can pay your loved ones a lump sum benefit so long as the death occurs after the exclusion period ends.
Does life insurance cover suicide in Australia?
- Yes, life insurance can cover suicide, but only after you've held a policy for a specific length of time — this is known as the exclusion period. While this can differ between insurers, you'll usually find that it's around 13 months.
The 13-month exclusion period
This means if you pass away due to an act of intentional self-harm within the first 13 months of taking out life insurance, your policy will be voided and your loved ones — the people you list as your beneficiaries — unfortunately won't receive a payout.
The 13-month exclusion period is widely used across the life insurance market. It's used to discourage people from taking out life insurance and then dying from suicide soon after for the purposes of receiving a payout for their loved ones. It may seem harsh but insurance is designed to cover unforeseeable events, not planned ones — the exclusion period simply stops people from taking advantage of the system.
What life insurance won't cover
Life insurance won't cover death as a result of suicide if it occurs within the 13-month exclusion period. However, you also won't be covered for any intentional self-injury or attempted suicide with:
In other words, insurance unfortunately doesn't help out if you intentionally self-harm. However, income protection can cover you for a short period of time if you need to take some time off work due to poor mental health.
Can I get life insurance if I've attempted suicide?
- Yes. If you've attempted suicide in the past you can still get life insurance but you might pay more for a policy.
Like a pre-existing condition, if you've attempted suicide, it's likely to make finding life insurance is a little trickier. The insurer will typically ask you a series of questions about when you first experienced symptoms and if you currently still experience any of these symptoms. This is so they can try and determine how much of a risk it is to insure you and what to charge you for a policy.
In some cases, insurers may apply exclusions to pre-existing medical conditions — for example, they might not cover any mental health-related claims.
Applying for life insurance after a suicide attempt
When you apply for life insurance, you're required to disclose details about your medical history — this helps the insurer determine how much they'll charge you for a policy.
They will likely ask questions about:
- When you first experienced symptoms and if you still do
- Whether the cause of the problem has been identified or diagnosed by a qualified health professional
- Any medication you are taking
- Managing your condition
- Family health issues
- Your general lifestyle, including if you smoke
Once you've applied for life insurance and your application has been assessed, insurers will likely apply a premium loading — a charge on top of the normal premium rate. This is because you'll be considered a more risky applicant because there's more chance of you making a claim.
Submitting a claim if your partner has committed suicide
If your partner has taken their own life, you can submit a life insurance claim, so long as they held a policy in their name and meet the following criteria:
- They held the policy for longer than the exclusion period — this is usually around 13 months.
- They fully disclosed their medical history and answered all personal information honestly at the time of application.
- You are their nominated beneficiary — whoever is nominated will have to submit the claim.
Does life insurance cover a drug overdose?
- Yes, life insurance can cover a drug overdose but generally only if you did not have a drug habit before or when you applied for the policy. You also won't be covered if you pass away during the exclusion period.
You'll generally find many life insurers have specific exclusions related to drugs. For example, some won't pay out for claims which are caused or exacerbated by alcohol abuse or the use of drugs other than as prescribed by a medical practitioner.
Total and permanent disability cover usually also excludes any conditions directly or indirectly caused by drug use such as liver failure, heart attacks or Parkinson's disease.
When life insurance might not pay out
Before you take out life insurance, read the general exclusions section of the product disclosure statement (PDS). Here are some examples of when you might not be covered:
- If suicide or intentional self-injury is listed as an exclusion
- If you commit suicide within the exclusion period (usually 13 months)
- If you are not truthful about your health during the application
- If you take part in illegal activities, for example drug abuse.
- If you die during a dangerous activity (insurers often list dangerous activities like bungee jumping as an exclusion)
Suicide accounts for more than 3,000 deaths every year in Australia. 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 and Aboriginals and Torres Strait Islanders are most at risk of suicide.
If you need help, there are a number of resources available including:
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