Insurance Plans of America Blog
Life insurance is a financial product that can provide your loved ones with the means to pay off debts, cover funeral costs, and more. Suppose you have a life insurance policy and think about suicide. In that case, you need to know if your beneficiaries will receive benefits.
The Suicide Provision clause in your life insurance policy states that if you commit suicide before the exclusion limitation period has expired, you won't be covered. If you die by suicide within this time frame, there's a chance the insurer will deny payment of death benefits.
If you commit suicide, what are the risks for your loved ones?
Suicide may not result in a claim, and if it does, your family may not be able to receive the death benefit. But, there are circumstances where your loved ones can receive money from the death benefit if you died by suicide. For example, the suicide policy excludes suicides committed after the age of 25.
What is the exclusion limitation period?
The exemption period is the time frame within which your beneficiaries are exempt from having to pay any of your funeral costs. It can be one to five years and is known as the exclusion period. The death benefits could go even further if your life insurance policy has a "rest of life" clause.
What happens if your death benefits are denied?
The policy beneficiary can apply with the insurer. The insurer will determine the amount of your life insurance policy beneficiary allowance based on several factors. If the amount exceeds the policy beneficiary allowance, the beneficiary will receive the death benefit cash.
But, if the beneficiary's cash amount falls below the policy beneficiary allowance, the insurance company will pay the death benefit to the policy owner's next of kin. For example, let's say the policy owner died by suicide and the cash allowance is $100,000.
In this case, the insurance company will pay a beneficiary allowance of $80,000, and $40,000 will go to the policy owner's next of kin.
To sum up, suicide can affect your life insurance policy negatively. It's important to take care of your mental health if you are feeling suicidal, reach out to a trusted friend or professional to help you during hardships. Your life is valuable and there are people to help.
Consider the importance of a life insurance policy. It is especially important if you have a family. If you have questions about this matter, please consult a life insurance professional.
At Insurance Plans of America, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays, and we're here to help you out. Learn more about our products and services by calling our agency at (877) 752-6711. You can also request a free quote by CLICKING HERE.