Navigating life insurance claims after the loss of a loved one, especially due to suicide, is never easy and can feel overwhelming. Many beneficiaries find themselves confused about how payments will work, unsure of payout timelines, and if the amount they receive would be impacted. It is important to understand that life insurance companies will typically follow a different set of rules when it comes to suicide.
Does Life Insurance Pay Out After a Suicide?
Yes, life insurance does pay out after a suicide so long as there is not a suicide clause in effect. A suicide clause is a specific period the life insurance company will set after a policy gets enacted. The reason this clause exists is to discourage people from taking their own lives immediately after obtaining a policy so that their beneficiaries can get a payment.
In other words, if the life insurance policyholder takes their own life within the period set by the suicide clause, no payout would be given. So long as their suicide was after this timeframe, the payout should occur. There are some exceptions to this rule, but generally speaking, this is the typical process.
How Long Is the Suicide Clause on Life Insurance?
On average, most life insurance policies have a suicide clause that lasts 2 years. Some states mandate only a 1-year term length for suicide clauses. It is best to double-check your life insurance policy to ensure the length of the clause.
It is also important to note that a term's length can restart if updates are made to the policy. So, if you were to update your life insurance policy and it has only been 1 year, the clock would reset back to 0 days passed and you would have to wait 2 years out again from the day you updated the policy.
Is Suicide Covered in Term Insurance?
Term life insurance, otherwise known as term insurance, is a life insurance option that only covers a person's pre-determined timeframe. Term insurance is typically divided into 10, 20, or 30-year increments. With term insurance, there is typically no suicide clause, meaning that if the policyholder commits suicide, there is a payout for the beneficiary, granted so long as there are no other specific terms or conditions or any policy violations.
Additionally, term insurance can also provide additional financial assistance and refund some of the premiums already paid into it back to the beneficiary. Term insurance expires once the pre-determined timeframe passes and, if it does expire, there is little you can do to get a payout.
What Is an Incontestability Clause?
The incontestability clause, in context with suicide and life insurance, refers to the period in which the life insurance company will be unable to deny a claim due to errors, misstatements, or suicide, so long as the suicide clause expires. Essentially, the incontestability clause is a catch-all that ensures beneficiaries get paid out despite any issues after a certain period.
Remember that while the incontestability clause gives beneficiaries a blanket protection from potential denials, this does not mean they are immune from denial entirely. There can be a multitude of reasons such as fraud, misrepresentation, or non-payment, that would still allow the life insurance company to deny a claim.
What Are Some Reasons for a Life Insurance Claim Denial?
There are several reasons a life insurance claim can lead to denial:
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Policy Expiration - The life insurance policy has expired and coverage is no longer valid.
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Policy Lapse - The life insurance policyholder failed to make payments, thus making the policy no longer valid.
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Lying or Withholding Information - Lying or withholding information on life insurance applications negates the policy.
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Missing or Outdated Information - Omitting key information or using outdated information may negate the life insurance policy and lead to a denied claim.
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Death from Illegal or Criminal Activity - Life insurance policies will not pay claims if the policyholder dies due to criminal activity or committing illegal acts, such as illegal drug use.
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Suicide - The suicide clause in life insurance policies will prevent any claims from getting paid out.
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Travel or Living Abroad - Travel itself is not bad, but excessive travel or living abroad can lead to a denied claim.
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Death During the Policy Waiting Period - The contestability period, or the timeframe before the incontestability period, is often heavily scrutinized. If death occurs during the contestability period and there are any discrepancies, life insurance companies can deny the claim.
Remember, these reasons are usually the most common. Typically life insurance companies will use the reasons above to justify their denial.
What Do You Do if Your Life Insurance Claim Was Denied?
A denial of your claim is a frustrating experience, especially when suicide and life insurance are in the mix. While feelings of anger and confusion are normal, it is best to take a step back and try to understand why your claim got denied. Insurance companies will often provide a letter explaining the reasoning behind their denial.
Once you understand the reason behind the denial of your claim, gather as much evidence that supports your claim as you can. This can include medical documentation, police reports, autopsy findings, and medical examiner reports. Insurance claims investigators can make mistakes, and providing key evidence can mean the difference in contesting your denial.
It also helps to understand your rights under the law. Remember, the law is an invaluable tool that can help ensure that you get the claim you rightfully deserve. Your state laws may allow you to challenge your denial better and fight for your claim.
Should I Hire a Lawyer if I Receive a Claim Denial?
After losing a loved one, it can be difficult to handle affairs like life insurance claims, especially if these claims get denied. Remember, life insurance companies are not always going to be on your side. If there is an opportunity for them to deny your claim, they will take it almost all the time.
Hiring an attorney allows you to take the time to heal and move forward from your loss while also ensuring that you can fight to get the payout you deserve. Not only does hiring a lawyer help you increase the chances of success for your appeal, but you could even get more benefits than initially approved for.
Navigating the claims process and leveraging the law on your side can be challenging, but with a lawyer, you do not have to worry about any of it. A lawyer will assist you in filing your appeal, gathering supporting evidence, and walking you through all the legal resources that can help you go against the denial the insurance company gave you.
Talk to an Insurance Claims Denial Lawyer for Help Today
Dealing with a denied life insurance claim is emotionally draining and mentally exhausting, especially after the loss of a loved one. Suicide and life insurance are tough to deal with, and understanding complex legal and policy terms can feel overwhelming and impossible to navigate. Even with this guide, it is still difficult to know how to increase your chances of reversing a denial when every case is different in its own way.
By partnering with an experienced insurance claim denial lawyer, you have an advocate who is ready to help you fight for your claim and ensure your rights are protected. Whether it is negotiating directly with the insurance company, filing appeals, or taking direct legal action, proper legal representation bolsters your chances of securing your claim.
Time is not on your side. There are deadlines you need to meet to ensure your appeal gets through properly. Do not wait to seek help.
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