Does Life Insurance Cover Suicidal Death? Types & Other Options

By Okbima 08 Jul 2024
does life insurance cover suicidal death

Does Life Insurance Cover Suicidal Death? Understanding how life insurance covers suicidal deaths in India is crucial for policyholders & their nominees. While most life insurance policies do cover suicide, there's an initial exclusion period to consider. However, after this period, policies provide coverage, offering financial security to the nominee.

 

Does Life Insurance Cover Suicidal Death?

Yes, life insurance policies generally cover suicidal death in India, but there's an important factor to consider.

  • Exclusion Period: Policies exclude coverage for suicide during the first year after the policy is purchased. This is to discourage people from taking out insurance with the sole intention of benefiting their nominees through suicide.

  • Policies After First Year: If the death by suicide happens after the first year of the policy, the nominee will usually receive the death benefit.

 

Here's a breakdown of policies issued before and after January 1, 2014:

  • Before Jan 2014: No benefit if suicide happened within the first year. Benefit paid after one year.

  • After Jan 2014: No benefit for suicide within the first year. Benefits are generally paid after one year.

 

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Types Of Life Insurance Plans That Pay For Suicidal Death Benefits

In India, most life insurance plans that offer a death benefit will also cover suicidal death, but with a one-year exclusion period. This applies to various plan types, including term insurance, savings plans, wealth plans, etc.

  • Term Insurance: These plans provide pure life cover for a specific period. Suicidal death benefit is paid after the initial exclusion period.

  • Savings Plans: These plans combine life cover with a savings option. They follow the same exclusion period for suicide as term plans.

  • Wealth Plans: These are investment-oriented plans with a life cover option. The suicide exclusion period applies here as well.

  • Unit Linked Insurance Plans (ULIPs): These plans are a bit different. The death benefit payout due to suicide after the exclusion period might be determined by the fund value of the units allocated to the policyholder.

 

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Suicide Death Claim In ULIP Plans

With ULIPs (Unit Linked Insurance Plans) in India, the death benefit payout due to suicide after the exclusion period works differently than traditional life insurance plans.

  • Fund Value on Death: If the policyholder dies by suicide after the exclusion period of 1 year, the nominee will receive the fund value of the units accumulated in the policyholder's account at the time of death.

This means the nominee won't receive the full death benefit amount (sum assured + accrued bonuses) that a regular life insurance plan would pay in case of death by natural causes after the exclusion period.

 

Difference Between ULIP Plans Vs Life Insurance As Per Suicidal Death

Here's a table summarizing the difference between the ULIP plans and life insurance as per suicidal death benefits.

 

Scenario

Traditional Life Insurance

ULIP

Death by Natural Causes (After Exclusion Period)

Full Death Benefit (Sum Assured + Bonuses)

Full Death Benefit (Sum Assured + Bonuses)

Death by Suicide (After Exclusion Period)

Full Death Benefit (Sum Assured + Bonuses)

Fund Value of Units in Account


 

Other Options For Coverage For Suicidal Death

Unfortunately, there aren't any life insurance plans specifically designed to cover suicidal death. The current options are the standard life insurance policies with a one-year exclusion period.

However, there are resources and support systems available to help you during difficult times. Here are some alternatives to consider:

  • Critical Illness Cover: This type of insurance provides financial support if you're diagnosed with a critical illness like cancer or heart disease. While not directly related to suicide, it can ease financial burdens during a challenging time and improve your well-being.

  • Employee Assistance Programs (EAPs): Many companies offer EAPs that provide confidential counseling and support services to employees facing mental health issues, including suicidal thoughts.

  • Mental Health Hotlines: Many hotlines offer confidential support and guidance for people struggling with suicidal ideation. Some of them are Lifeline Foundation: 1311 (toll-free), AASRA (Association for Awareness and Suicide Prevention): 91+98 2046 6786 (toll-free) & iMpower (Mental Health Helpline): 1800-567-6788 (toll-free).

 

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Why Okbima Is The Best Option To Get Life Insurance?

Okbima is a good option to consider when looking for life insurance for many reasons such as we offer many insurance options, convenience & customer support.

  • Many Insurance Options: Okbima offers many insurance product quotes from over 30 life insurance companies in India. This gives you a broad selection of plans to compare.

  • Convenience: You can compare quotes and purchase a policy online through Okbima's platform, saving you time and effort.

  • Customer Support: Okbima offers 24/7 customer support, which can be helpful if you have questions during the selection process.

 

Read More:

Who Can Be Nominee In Life Insurance Policy? Types & Factors To Consider

When Should I Get Life Insurance? Benefits, Types & Factors To Consider

When Life Insurance Policy Lapse? Reasons, Effects & Prevention

Why Life Insurance Is Required? Types & Choose The Best Policy

Can You Have More Than One Life Insurance Policy?
 

Conclusion

In conclusion, life insurance in India generally covers suicidal death, subject to a one-year exclusion period. Policies issued before and after January 1, 2014, follow similar guidelines, ensuring benefits are paid after this initial period. 

Understanding these terms is crucial when considering life insurance, ensuring financial security for your family under challenging circumstances. For further assistance, you can contact “Our Experts”.

FAQs

Suicide is not covered in term insurance policies within the first two years of the policy being in effect.

Changing a life insurance policy can affect coverage for suicide depending on the specific terms and conditions of the new policy.

The exclusion period for suicide is usually two years from the date the policy was taken out.

Yes, if the policyholder dies by suicide after the exclusion period has passed, the nominee can receive the payout.

No, the premiums paid into the policy will not be refunded if the policyholder dies by suicide within the exclusion period.

Policyholders need to disclose any suicide clause in their policy to their nominees so they understand the terms of coverage.

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