Does Life Insurance Cover Suicide?

Suicide is a serious health problem in Australia. In the 2016 World Health Organisation’s report, the dominant cause of death for Australians between the ages of 15 and 44, was suicide. The shocking statistic has led to many queries regarding life insurance and suicide and if companies do in fact cover death by suicide.

Published March 24, 2017

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We have written this guide to answer your life insurance suicide questions, particularly when is suicide covered and when it will not be covered by your life insurance, in the hope that this will assist you in making informed decisions when choosing life insurance cover.

Do life insurance companies cover suicide in Australia?

With the raising awareness of mental illness in Australia, you are now able to buy policies that cover suicide. Having suicide covered by life insurance policies in Australia is common however generally the policy needs to be in place for longer than 13 months from the date of issue. It’s important that you review your PDS to confirm this.

Life Insurance Can Cover Suicide

It is a common myth that suicide is not covered by Australian life insurance policies however this is not true, as many do cover suicide after the policy has been in place for longer than 13 months. There are exceptions; certain Direct or Group policies may exclude suicide for a longer period or entirely.

It’s important that you check your Policy Disclosure Statement (PDS) for exclusions. For example, NMRA will not pay out life cover for their Fast Track Cover product during the first five years following the cover Commencement Date if death or terminal illness is directly and indirectly due to suicide or intentional self-injury.

On the other hand, MLC Insurance only excludes suicide during the first 13 months of your policy commencement. AIA similarly excludes death caused by suicide only during the first 13 months of policy commencement or reinstatement of the benefit. However, AIA’s Accidental Death Policies, like most accidental death policies, permanently exclude suicide and intentional self-inflicted injury.

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When does suicide void a life insurance payout?

Suicide will void a claim payout when suicide or intentional self-injury is listed as an exclusion in the policy, or when you have committed suicide within the exclusion period in the policy which could be within 13 months of commencement however this will depend on the product disclosure statement of the life insurance policy.

It is essential that you confirm with your insurance company exactly what your life insurance policy excludes and when the period of exclusion may or may not be removed.

If you need help finding a policy that offers comprehensive cover contact us and our expert consultants will provide you with all the essential information for you to make an informed decision.

Let us be clear. If you are reading this because you are contemplating taking your own life so your loved ones can claim on your death benefit, you are making the wrong decision. You are infinitely worth more alive, than dead. Call Lifeline on 13 11 14 if you are experiencing personal crises. Asking for help is a sign of courage, not weakness.

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