5 min read
Updated on Aug 11, 2023
For solo-earning members of a family, a life insurance policy serves as an excellent option to secure their family members monetarily and reduce their financial stress. But do life insurance companies offer coverage against suicidal deaths? If so, are there any conditions, and what are the plans that allow coverage against suicidal deaths? To confirm all such doubts, one should review the policy document carefully. In this post, let’s dig into this topic further.
Yes, life Insurance pay for suicidal deaths in India. So, if a policyholder dies by committing suicide, the nominee can expect a certain amount of death benefit because most insurers pay death benefit for suicidal deaths.
However, when making a life insurance claim for suicidal death, you need to check some clauses related to the payment tenure of the policy. These conditions are mentioned in the policy document.
Here is a list of different types of life insurance plans that allow suicidal benefit to the nominee of life insurance policies:
Generally, suicidal death benefit applies to all kinds of life insurance policies, including:
However, each plan might differ in terms of the scope of the death benefit it offers.
In 2014, IRDAI, or the Insurance Regulatory and Development Authority of India, laid down some new provisions for claiming death benefits for suicidal deaths.
No death benefit will be offered under life insurance policies bought before January 2014 if the insured dies by committing suicide within the first 12 months of buying the plan
As per the new provision, insurance companies will have to pay 80% of the premium amount paid to the nominee in case the insured dies of suicidal death during the first 12 months of the policy. This is in case of insurance plans bought after 2014
The policy will become invalid, and the death benefit claim will not be entertained
For policies that are bought after 2014, the nominee of the plan will receive death benefit even in case of death by suicide taking place within 12 months of the plan
This provision was introduced to benefit the insurance companies and to stop fraud cases while making insurance claims
For suicidal deaths occurring after the first 12 months of buying the policy, the death benefit will be paid as usual (sum assured will be paid as per policy term)
In normal circumstances, suicide is not regarded as an unforeseen death. However, insurance companies do offer death benefit in case of suicidal deaths to help the family members of the insured overcome any financial crisis. There can be numerous reasons for the insured to have taken such a harsh decision like committing suicide. Some such reasons can be debt, depression, and stress. The payout received as a death benefit would help the family deal with the financial liabilities and sustain their lives better.
Below are some of the common exclusions under life insurance plans in India:
As per IRDAI’s new provision, most insurers have updated the policy terms of their life insurance plans. So, as per the indications by IRDA, insurers must offer a lump sum amount of paid premiums to the nominee of the policy if the insured dies by committing suicide within one year of the policy. And if the insured dies after one year, the insurer will have to pay the entire death benefit as per the policy terms.
Below are the cases when a person is not eligible for suicidal death benefit:
To Sum Up
There has been a huge rise in the number of suicidal deaths in India for various reasons such as depression, emotional breakdown, instability in life, debts and more. Whatever the reason be, when there is a suicide in the family, the rest of the members are bound to get affected. And that is the reason why insurance companies cover suicidal deaths in India.
Insurance companies may reject life insurance claims if they find any fraudulent or incomplete information offered by the policyholder.
The nominee of the policyholder gets the life insurance death benefit amount.
Yes, a policyholder can buy as many life insurance plans as they want. However, they all should come under the human life value estimate.
If not claimed, a life insurance policy is turned over to the policyholder's state of residence as per laws of unclaimed property.
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