Life Insurance and Suicide

Arthur Miller's Death of a Salesman has made the proposition of committing suicide so that your family can collect the death benefit on an insurance policy famous. However, it doesn't work like that in real life. Most insurance policies come with a long list of exceptions, which usually includes a suicide clause. If they even so much as smell foul play, they will exercise the clause to the full extent of the law.

The Suicide Clause

Classically, suicide clauses essentially rendered the insurance policy void, so that all the premium payments made were for naught and the bereaved were left in no better a position than before. Often, it was actually much worse than before the deceased has committed suicide.

Things have been changing of late. There is a second type of suicide clause gaining popularity throughout the world.

This clause says that, while the death benefit will not be paid in the event of the policy-holder taking his or her own life, the full payments made during the time of the policy are to be returned to the family in such a situation. This has become widespread. As standard suicide clauses have been outlawed in some countries, many insurance companies see this as a cheap alternative to having to pay out to the family. At this same time, it still manages to live up to the original goal of the clause: to prevent policy-holders from committing suicide in order to allow their family to collect on the policy.

Another major development in this area is the condition that states that the suicide clause only remains in effect for the first two years of the term. That is, after two years of paying premiums, suicide will not stop the family from collecting on the policy. Maybe this is the kind of policy Willy Loman had.

Is the suicide clause on its way out?

More and more policies these days are becoming more sophisticated about the way they handle suicide. Furthermore, more policies are dropping the suicide clause altogether! It seems that statistics have shown that it does not do them any good. For most people at high risk for suicide, their insurance policy isn't going to stop them.

A more nuanced understanding of suicide has also changed things. Suicide is seen more as a symptom, side effect, or medical condition than it is as a choice these days. Studies are beginning to prove that committing suicide is not associated with mental illness alone; sadness is not a cause. Advanced psychology and modern medicine have offered a new understanding of suicide, so it seems much less necessary to prevent fraud by self homicide. If, like cancer, suicide is an uncontrollable medical problem, why shouldn't it be covered?

If you suffer from depression or are high risk for suicide, it makes sense to include a favorable suicide clause or no clause at all in your search for the right life insurance policy. You can compare life insurance quotes online until you're blue in the finger, but it will not make a difference if mental illness leaves your family bereft and without the death benefit from your life insurance.