Does Life Insurance Pay for Suicidal Death in India 2023 – Check Old & Current Provisions

Life insurance policies serve as a safety net for the family members of policyholders by offering them financial protection during challenging times after the demise of the insured. However, it is important to understand the death benefit policy of term plans in case of sensitive issues like suicidal deaths. 

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.

So, Does Life Insurance Pay for Suicidal Deaths in India?

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.

Which are the various kinds of Life Insurance Plans that Allow Suicidal Death Benefit? 

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:

• Term Plans
• Savings plans
• Wealth creation plans

However, each plan might differ in terms of the scope of the death benefit it offers.

Old and Current Provisions of Death Benefits in case of Suicidal Death

In 2014, IRDAI, or the Insurance Regulatory and Development Authority of India, laid down some new provisions for claiming death benefits for suicidal deaths.

Why is suicidal death covered by life insurance companies in India?

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.

Suicidal Death Exclusions under Life Insurance Plans in India

Below are some of the common exclusions under life insurance plans in India: 

• There are some life insurance plans with clause which states that the insurance company will not pay any death benefit if the policyholder dies by committing suicide within 12 months of the policy purchase or before renewing the policy
• Most of the life insurance policies cover suicidal death only after the completion of one year of the plan
• If the suicide takes place within one year of buying the policy, the insurer offers only 80% of the premium paid to the nominee of the policy
• If there is a lapse in the premium payment of the life insurance policy, the insurer will not pay any death benefit
• Even in the case of fraudulent or incomplete details in the insurance policy offered by the insured, the insurer is not liable to pay any benefit

Does Every Life Insurance Plan Offer Death Benefit for suicidal deaths 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.

Under which Cases is a Person not Eligible for Suicidal Death Benefit Cover?

Below are the cases when a person is not eligible for suicidal death benefit:

• In case of misleading details offered by the insured
• Insurer pays the death benefit to the nominee only if the insured has not committed any fraudulent ways while buying the policy
• Also, if the policyholder is insured under any group plan, the nominee is not eligible for any payouts

Popular Life Insurance Companies India, 2023

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.

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