Life insurance & suicide in the UK

Suicide prevention in the UK has been credited for the recent decline in the number of suicides, but unfortunately, it’s still very much an everyday occurrence.

Over the past 3 years, we have seen a decline in the number of suicides, but that doesn’t mean it’s a subject which can be ignored.

In 2016, 4,941 people in the UK committed suicide[1] with the number of men being 3 times higher than that of women[2]. That said, female suicide rates are higher than they have been in a decade[3].

According to insurer Aegon, 6% of their life insurance claims in 2017 were made as a result of suicide[4].

Life insurance can cover suicideLife insurance and suicide

Losing a loved one not only brings heartbreak as you try to decipher their reasoning, but it can also present severe financial burdens.

It’s a common misconception that life insurance doesn’t pay out if the cause of death is suicide, this simply isn’t true! But it’s also not that simple.

It’s all in the policy’s small print. There are certain clauses written into a life insurance policy that determines whether or not a pay out is issued.

The suicide clause, (or ‘suicide provision’)

The suicide clause is the period of time following the start of the policy in which a pay out will not be made if the cause of death is suicide.

This clause exists to protect the insurer and is designed to stop vulnerable individuals from committing suicide, for the purpose of securing a pay out.

However, on occasions, if a suicide is committed within the period stated by the suicide clause, insurers will refund the premiums which have been paid to date.

So, even if the suicide was committed during the suicide clause period, it’s still important to contact the insurer.

The suicide clause in summary:

The contestability clause, (or ‘contestability period’)

The contestability clause refers to the period in which an insurer can investigate the death of a policyholder.

Whilst the suicide clause refers solely to a death caused by the policyholder, the contestability clause applies to any death within the period stated by the policy. The contestability clause commonly runs for the same length as the suicide clause.

For example, if the policyholder dies of cancer, the insurer has the right to review medical history and autopsy reports to determine whether or not the policyholder was a smoker or substance abuser.

If this is deemed to be the case and it was not disclosed during the application process, the insurer can decline to pay out.

The contestability clause in summary:

Life insurance and non-disclosureLife insurance, suicide and non-disclosure

A pay out can be denied on grounds of non-disclosed information (or ‘non-disclosure’).

This is when the policyholder withholds crucial information during the application, regarding their mental or physical health, smoking habit or substance abuse.

In this instance, regardless of whether the suicide clause has lapsed, a pay out can be denied if the insurer identifies key information which had not been disclosed.

For example, 90% of all suicide victims suffer from a mental illness[5]. If a policyholder has a mental illness or alcohol/drug dependency and hasn’t disclosed it, then the insurer doesn’t have to pay out, regardless of the cause of death.

This highlights the importance of being open and honest when applying for life insurance. If you’re worried about the impact your habits or wellbeing will have on your premiums, start your quote today and one of our consultants will be happy to help run through your options.

Sometimes the suicide and contestability clauses don’t exist.

The aforementioned suicide and contestability clauses tend to be present with regards to most private life insurance policies.

However, group life insurance paid by an employer doesn’t usually have a suicide clause. This means that it doesn’t matter how soon after the start date of a policy suicide is committed, a pay out will still be made to the policyholder’s beneficiaries.

Sometimes a policy will state no pay out, even if the cause of death is suicide.

On rare occasions, some policies will have a ‘no suicide’ element, regardless of the time after start date that the event occurs. In this instance, under no circumstances will a pay out be made if the policyholder commits suicide.

Getting life insurance following a suicide attempt

If you have previously attempted to commit suicide, it’s still possible to obtain life insurance.

The application will, however, most likely go through a manual underwriting process. The information regarding when the attempt took place and any treatment which has been received since will be taken into account.

This information will then be used to calculate your monthly premiums based on the level of risk the insurer believes you pose.

Life insurance and suicidal thoughts

If you have previously experienced suicidal thoughts and these have been shared with a professional, it’s also still possible to obtain life insurance.

The process would again go to manual underwriting, where information regarding your thoughts such as time since the occurrence and treatment received will be taken into account.

As a beneficiary

Being the beneficiary of a policyholder who has committed suicide can be very upsetting, daunting and also confusing.

There are 3 simple steps for the beneficiary to take:

  1. Review the life insurance policy to determine the terms of the suicide clause. Was the suicide committed within this period?
  2. Always contact the insurer. Even if the event took place during the suicide clause, some insurers offer a payback of any premiums already paid
  3. Talk to an authority. Losing a loved one is difficult no matter what the cause. But when a loved one chooses to end their life, it can often leave those left behind feeling even more hurt and confused. Add this to the financial pressures and it’s no wonder many beneficiaries would feel the weight of the world on their shoulders. There are a number of agencies detailed at the bottom of this article who can offer advice or just a safe space to talk.

Life insurance and suicideLife insurance and suicide

Are you experiencing suicidal thoughts?

If you’re experiencing suicidal thoughts the single most important thing is to talk to someone about how you’re feeling.

There’s always someone out there to support you and you don’t need to face things alone.

If you don’t feel you can talk to a friend or family member then you can contact any of the following bodies for free:

Have you lost a loved one?

Remember, there are always people to talk to during this incredibly difficult time. As well as the organisations mentioned above there is also:

Finally, if you’ve recently lost a loved one as a result of suicide, don’t be deterred from making a claim on their life insurance.

Get in touch with the insurer and enquire exactly what it is you’re entitled to.


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Sources:

[1] https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/articles/whoismostatriskofsuicide/2017-09-07

[2] https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/suicidesintheunitedkingdom/2016registrations

[3] https://www.samaritans.org/sites/default/files/kcfinder/files/Suicide_statistics_report_2017_Final.pdf

[4] https://www.aegon.co.uk/content/dam/ukpaw/documents/life-protection-claims-aid.pdf

[5] http://www.insuranceclarity.com/life/life-insurance-suicide-clause