Life insurance and suicide Author:    Posted under: Life InsuranceLife Insurance questions answered


Life insurance is a gift to our loved ones and to benefit ourselves. We think about our family and their future and ensure that their needs will be provided if the worst happens to you; these are some reason why we purchase a life insurance. A very considerate and selfless act indeed, what if this self-sacrificing person feels hopeless, helpless, and worthless one day and decides to take his life.* What will happen to that gift?

Suicide was prohibited from life insurance policies and suicides were concealed in unconsecrated ground and outside of the cemetery limits, that was part of the past when state and the church works more directly. Those were the times, that be lack understanding with mental health problems. This era is very fortunate that time has changed and still changing and the society has a clearer understanding of why people commit suicide. Even the church and the state have opened their minds, as well as the life insurance companies.

If the policy holder commits suicide, his selfless act in getting life insurance for his family will only leave them in more severe financial difficulty. Just like the high-profile deaths of actor Heath Ledger, which initially were thought to be suicide and have brought attention to a serious financial question: Can certain factors (such as suicide) invalidate a life insurance policy?**

There are only some exclusions you ought to look for, the suicide exclusion. Several people believe that suicide invalidates a life insurance policy. This isn’t essentially true, suicide exclusion generally states, that the insurance contract will become invalid if the act happens inside the two year policy. The general standard of waiting period for suicide coverage begins at the moment you purchased the policy till the next two years. Most insurance companies do this to put off people from buying a life insurance policy.

The suicide exclusion gives  the recipients  a well defined idea of what limitations will be place upon their chances of receiving a payout from the life insurance policy, but it is also there protect the insurance company from Adverse Selection. Depending on the written will of the deceased policy holder and the law, the payment can be claimed by the beneficiaries.

Adverse Selection is used to bring up to the tendency of those who have high-risk lifestyles, chronic health problems or who are embarking on dangerous or unhealthy jobs like  mining, area of civil unrest and military jobs. To try to lessen the financial consequences of such actions, life insurance companies raise premiums and suggest only limited coverage for them.

If we want to protect our family and their future talk to them about it so they can help you decide and review the insurance policy rules.

* http://www.webmd.com/mental-health/recognizing-suicidal-behavior
*http://www.bankrate.com/finance/insurance/protecting-life-insurance-policy-claims-1.aspx#ixzz17VVCPKRg

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