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Does Life Insurance Cover Death by Suicide?

 


Does Life Insurance Cover Death by Suicide?: 
When the cause of death is suicide, most life insurance policies will approve a claim only if the policy has been fully active for two years. Any lapses in the policy – like if the premiums weren't paid on time – tend to restart this two-year period. The fine print also typically clarifies that it makes no difference whether the policyholder is designated as sane or not. No matter how large the benefit from any life insurance policy you may have is, it is not worth more to your loved ones than having you around.

If you are contemplating suicide, help is available. Call any time of day for free, confidential support from the National Suicide Prevention Line at 800-273-8255. The organization also operates more than 150 crisis centers that offer encouragement and local resources. A number of different treatments have been shown to help, ranging from different types of therapies, medication, and skills training. Sometimes the solution is a combination of more than one of these approaches.

You can also call the National Suicide Prevention Line if you have concerns that someone you love may be thinking about suicide. The crisis line can offer advice and support to help understand and cope with this difficult situation.

Is Life Insurance Taxable?

Life insurance death benefits are typically not taxable, but you may be required to pay taxes on any interest you receive on the death benefit. For instance, if the death benefit is paid in installments, the beneficiary may need to pay interest on the remaining amount. You may also owe taxes if the policyholder’s beneficiary is their estate (instead of an individual) and the total value of the estate exceeds the limits set by the IRS.

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