Why don’t life insurances cover suicides?
I am not suicidal but have always wondered why life insurance won’t cover suicides.
- Tad DubiousLv 71 year ago
Hard to make a profit when the person paying for the insurance has complete control of when the policy will pay off.
- dewcoonsLv 71 year ago
Some policies do. Usually you have to have carried for the policy for a certain length of time (usually 2 years) before it will pay off. That is to prevent people from buying a giant policy today and killing them tomorrow to make their heirs rich.
Usually a suicide is the result of a mental illness. Just as a policy would cover you if you got cancer (even though it was your fault for smoking) or heart disease (even though it was caused by your diet and being overweight), so many policies will cover a suicide because it is an "illness."
But again, that will be determined by the terms of the policy. It will normal state whether it will cover a suicide or not.
- 1 year ago
Because the insurance companies are a business and don't want to have to payout money period and use deciding to end your own life as an excuse to get off paying. Insurance is supposed to cover the unforeseeable not murder or suicide but I am sure that there has to be an insurance company that covers it they all should death is still death.
- David 14Lv 71 year ago
Read the policy. Sometimes they do after a certain period of time.
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- CliveLv 71 year ago
For the extremely obvious reason that an insurance company would be out of its tiny mind to offer a policy where YOU can decide when the "accident" happens. Or else it would be easy to bankrupt the company - every intending suicide would want to take out a policy before doing the deed, and get a big payout for whoever they leave behind. If they allowed that, they'd soon go bust!
In fact they generally will cover suicides, but only after you've had the policy for a reasonable time which will be stated in the policy. Maybe a couple of years. Then if you commit suicide, it won't have been something you were planning on when you signed up for the insurance.
The intention of insurance is to cover you in case of an expensive accident, and insurance won't pay out if the company can prove that you deliberately caused it. For example, deliberately crashing your car and then claiming - that's also the crime of insurance fraud. Similarly, so is killing someone so you can benefit from their life insurance.
Insurance is a bet by the company that what you want to insure against won't happen, and they set the price at a level where (hopefully) they will make enough money be able to pay out on the occasions when it does and still make a profit. It's not going to work if they pay out for things that aren't accidents. That will throw all the calculations out. It's all based on statistics of how likely it is that things will happen and they employ actuaries, who are experts in statistics. Which is why you get asked all kinds of questions when you take out insurance. This is so they can fit your facts into the actuarial model and come up with the best price they can. For example, young drivers always get charged more for car insurance because we know they have the most accidents.
Life insurance is a bit different because we all have a 100% probability of dying, so the bet is WHEN this will happen. Whole life insurance always pays out so the price is set so that most people will end up paying far more in than they ever get out. (So you can ask yourself whether it's ever worth having. Why not just invest the money instead?) Term insurance is cheaper because the bet is that you won't die in the next X years. If it covered suicide, the price would have to be FAR more.
- curtisports2Lv 71 year ago
Many policies do cover suicide, but have a exclusionary or contestability period that must pass before a claim will be paid. This is to prevent people from buying insurance and then going out and offing themselves so a benefit can be paid. With exclusionary or contestability periods, insurance companies can contest the claim and may deny it. It can also apply to death in the course of the deceased committing a crime or abusing drugs or alcohol.
- The First DragonLv 71 year ago
Usually they will, but not if the suicide occurs too soon after taking out the policy.
Otherwise, some people who are desperate for money to help their family, might take out a policy and immediately commit suicide. That would be really messed up, and we certainly don't want to encourage it.
And that is completely aside from the fact that the insurance company would be harmed by it. Even if the insurance company were able to find some way to profit from it, it would be completely unethical to have a policy that might encourage suicide.
- MattLv 61 year ago
For the same reason deliberately burning your house down to collect the insurance money is illegal. Even though in this case you won't collect the money, your family would.
- JeffreyLv 71 year ago
If they did just about every suicidal person would buy a big policy just before killing himself. Life insurance is designed to cover unexpected deaths. If you commit suicide you do it with the expectation of dying.
- Anonymous1 year ago
Under Common Law, suicide, or the intentional taking of one's own life, was a felony that was punished by Forfeiture of all the goods and chattels of the offender. Under modern U.S. law, suicide is no longer a crime. Some states, however, classify attempted suicide as a criminal act, but prosecutions are rare, especially when the offender is terminally ill. Instead, some jurisdictions require a person who attempts suicide to undergo temporary hospitalization and psychological observation. A person who causes the death of an innocent bystander or would-be rescuer while in the process of attempting suicide may be guilty of murder or Manslaughter.