Just wanted to know, does a life insurance policy pay if the insured commits suicide?
Total Comments: 6
Posted: Sat May 26, 2012 02:38 pm Post Subject:
Yes, as long as the policy was in force long enough. Most policies exclude suicide for 2 years. With some policies, it is a shorter period of time.
Posted: Thu May 31, 2012 01:32 am Post Subject:
Even if the policy was not in force for two years (one year in a few states by law, such as Missouri, or less than two years if stated in the contract), the insurance company will still refund all the premiums paid to the beneficiary.
Posted: Thu May 31, 2012 04:08 pm Post Subject:
Max, Can you confirm something. I know that the premiums will be refunded. I think that it may even be with interest. However, I thought that this was treated as if the policy wasn't in force and the premiums, therefore, would get refunded to the owner.
Do you know if your answer is correct? It makes more sense to me that if the owner is alive that they would get the refund. I do not know if I'm correct, thus, I am asking you.
Posted: Thu May 31, 2012 11:31 pm Post Subject:
therefore, would get refunded to the owner.
You have to remember that the insured is the owner in more than 90% of all individually issued life insurance, so refunding to the owner is usually fruitless because that person is now dead.
Do you know if your answer is correct?
ABSOLUTELY!! I don't believe I have copies of any policies that state that the death benefit will be paid to the owner. Instead, they all say the sum of the premiums paid will be paid to the named beneficiary in lieu of the stated death benefit, and minus any loans or withdrawals/surrenders.
The following is reproduced verbatim from a Life Insurance Company of the Southwest (LSW) IUL policy issued in 2009:
Suicide Limitation
If the Insured dies within two years of the Effective Date as the result of suicide,while sane or insane, we will pay only a sum equal to:
1. the premiums paid; less
2. any withdrawals made; less
3. any debt to us on this policy.
A similar two-year period shall apply to any increase in Face Amount for which an application is required. Such period shall begin on the Effective Date of any such increase. During such period if the Insured dies as the result of suicide, while sane or insane, we will pay, in lieu of any such increase in Face Amount, only a sum equal to the Cost of Insurance that we have deducted from the Accumulated Value for such increase.
Payment will be made to the Beneficiary. (emphasis added)
How many more examples would you like to see?
Posted: Fri Jun 01, 2012 12:25 am Post Subject:
One example is sufficient. Thanks for teaching me something. I appreciate it.
Posted: Sat May 26, 2012 02:38 pm Post Subject:
Yes, as long as the policy was in force long enough. Most policies exclude suicide for 2 years. With some policies, it is a shorter period of time.
Posted: Thu May 31, 2012 01:32 am Post Subject:
Even if the policy was not in force for two years (one year in a few states by law, such as Missouri, or less than two years if stated in the contract), the insurance company will still refund all the premiums paid to the beneficiary.
Posted: Thu May 31, 2012 04:08 pm Post Subject:
Max, Can you confirm something. I know that the premiums will be refunded. I think that it may even be with interest. However, I thought that this was treated as if the policy wasn't in force and the premiums, therefore, would get refunded to the owner.
Do you know if your answer is correct? It makes more sense to me that if the owner is alive that they would get the refund. I do not know if I'm correct, thus, I am asking you.
Posted: Thu May 31, 2012 11:31 pm Post Subject:
therefore, would get refunded to the owner.
You have to remember that the insured is the owner in more than 90% of all individually issued life insurance, so refunding to the owner is usually fruitless because that person is now dead.
Do you know if your answer is correct?
ABSOLUTELY!! I don't believe I have copies of any policies that state that the death benefit will be paid to the owner. Instead, they all say the sum of the premiums paid will be paid to the named beneficiary in lieu of the stated death benefit, and minus any loans or withdrawals/surrenders.
The following is reproduced verbatim from a Life Insurance Company of the Southwest (LSW) IUL policy issued in 2009:
Suicide Limitation
If the Insured dies within two years of the Effective Date as the result of suicide,while sane or insane, we will pay only a sum equal to:
1. the premiums paid; less
2. any withdrawals made; less
3. any debt to us on this policy.
A similar two-year period shall apply to any increase in Face Amount for which an application is required. Such period shall begin on the Effective Date of any such increase. During such period if the Insured dies as the result of suicide, while sane or insane, we will pay, in lieu of any such increase in Face Amount, only a sum equal to the Cost of Insurance that we have deducted from the Accumulated Value for such increase.
Payment will be made to the Beneficiary. (emphasis added)
How many more examples would you like to see?
Posted: Fri Jun 01, 2012 12:25 am Post Subject:
One example is sufficient. Thanks for teaching me something. I appreciate it.
Posted: Fri Jun 01, 2012 12:45 am Post Subject:
You're quite welcome.
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