The Significance Of Suicide Clause In A Life Insurance Policy
An insured who feels dejected and financially distressed would be lured to end his
life believing that their loved ones could accumulate a great sum of money from their life insurance policy. Suicide of a family member is an overwhelming situation that can be difficult to handle. This horrible incident could also set hurdles in the process of claiming the life insurance benefits. But the question whether the insurer would honor insurance benefits to the beneficiaries will be rest on the clauses stated in the policy. There are cases when a policy's suicide clause hinders the deliverance of the benefits. Occasionally, the policy owner does not spot the clause pertaining to suicide because some policies employ vague words or phrases such as "intentional self-destruction" or "death by one's own hand" to portray the act.Forms
A suicide clause is merely one of the clauses or terms that you can find in most life insurance policies. Sometimes the clause only varies depending on the state or country. There are life insurance companies that take in a free look provision that provides policy holder a significant amount of time to check a policy after it was issued to the applicant, so he can decide whether he would continue to purchase the policy or pull back the application. Incontestability clause forbids the policyholder from cancelling the policy after it takes in effect for a specific period of time, except if the insured stop paying the premium.
Purpose
A suicide clause asserts that the policy benefits will not be released to the recipients if it has been proven that the insured has deliberately end his life within a period subsequent to the issuance of the policy. In some situations when a policy owner dies within the period covered by the suicide clause, the company usually conducts an investigation on the claim to make certain that the death of the insured was not a case of premeditated self-destruction.
Benefits
A suicide clause aims to protect the life insurance company from a situation where an insured person commits suicide with the intent to let their beneficiary collect the benefits from their policy. In view of the fact that current life insurance policies can effortlessly upsurge a face value of $100,000 or more, the clause can guard the insurer from releasing such a considerable sum of money.
Actually, insurers are not the only one who gains from suicide clause, even the frantic and emotionally distressed policy holders benefit from this clause. For example, if an anxious policy holder learns that their recipients might not acquire any benefits from their insurance plan if they commit suicide, the person may reconsider plan to commit suicide.
Period
A suicide clause usually covers the first two years that the life plan has been in effect. In case the suicide emerged within that period, the insurer will just return to the policyholder's recipients all premiums that have been paid to that point. If suicide transpired subsequent to the clause period, the life insurance company cannot reject the claim.
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