Is suicide covered under life insurance?
Buying life insurance gives a policyholder and his or her family a financial protection against unforeseen circumstances. But, what if the policyholder commits suicide? Is the insurer liable to pay the sum assured to the nominee?
Are suicidal deaths covered by life insurance? – This question is one of the FAQs on regulator IRDAI’s portal and among high searches on the Internet. As committing suicide is not considered as an event of uncertainty, people think life insurance players might not be covering it. But, this is not the case as most life insurance companies have plans that cover suicidal deaths, though with certain conditions.
As per IRDAI rules, if the policyholder commits suicide within 12 months of policy purchase then the nominee may not be paid the full sum assured. In such cases, the life insurance company would just provide the nominee a certain percentage of the premium paid during the policy term by the policyholder.
The Insurance Regulatory and Development Authority of India (IRDAI) says, “Under regular/limited premium policy: This policy shall be void if the life assured commits suicide at any time within 12 months from the date of commencement of risk, provided the policy is in force or within 12 months from the date of revival and the company will not entertain any claim except for 80% of the premiums paid till the date of death.”
Also read: Health insurance: IRDAI measures on policy cancellation, refunds and grace period – All you need to know
Under single premium policy as well, the insurance will be void “if the life assured commits suicide at any time within 12 months from the date of commencement of risk and the company will not entertain any claim except 90% of the single premium paid,
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