Understanding Suicide Clauses in Life Insurance Policies 
In New Jersey, many life insurance policies contain what is known as a suicide clause. This clause typically excludes coverage if the insured person dies by suicide within a set period after the policy’s issue date. This period, known as the “contestability period,” usually lasts for two years, but it can vary depending on the insurer. During this time, the insurance company may deny claims related to suicide, or they may refund the premiums paid instead of providing the death benefit.
The reasoning behind this provision is that insurers want to prevent individuals from purchasing life insurance with the intention of taking their own lives soon after. While the existence of a suicide clause may seem harsh, it is a common practice in the insurance industry. However, understanding the exact terms and the nuances of the policy is crucial for navigating such claims.
What to Do If Your Life Insurance Claim Is Denied Due to Suicide
If your claim for life insurance benefits has been denied due to suicide, it’s important to realize that a denial does not automatically mean the end of your claim. In New Jersey, you have several options for challenging the denial. The appeals process is often complicated and requires specific legal steps, so it is helpful to approach it strategically. Below are some of the most important steps to take if your life insurance claim is denied on the grounds of suicide.
Review the Policy Terms Thoroughly
The first step in challenging the denial is to thoroughly review the terms of the life insurance policy. This is where you will find the details of the suicide clause, including the contestability period and any exceptions to the rule. By understanding the fine print, you can determine if the insurance company has acted in good faith or if they have wrongfully denied your claim. For example, if the death occurred after the contestability period expired, the insurance company might still be required to pay out the policy’s death benefit, regardless of the cause of death. Similarly, the terms of the policy may specify that the insurer must pay the claim even if suicide is the cause of death after a certain period, or if the insured person was suffering from a mental health condition at the time of death. If the insurer has failed to honor these terms, you may have grounds to challenge the denial.Filing an Appeal with the Insurance Company
Once you’ve reviewed the policy terms, your next step is to file an official appeal with the insurance company. Most insurance companies provide a formal process for appealing a claim denial, and this should be done as soon as possible. The appeal process typically involves submitting additional documentation and evidence to support your case. This might include medical records, statements from healthcare providers, and any other evidence that can shed light on the circumstances surrounding the insured person’s death. A strong appeal may include the following:- Medical Records: If the insured had a history of mental illness or was undergoing treatment for conditions like depression or anxiety, these records could help establish that their suicide was not premeditated or was the result of a medical condition. This may support the argument that the insured individual should not be penalized for their mental health challenges.
- Witness Statements: Statements from friends, family, or healthcare professionals who can testify about the insured’s state of mind leading up to their death can be invaluable. If there were signs of distress or a documented history of mental illness, this could sway the insurance company in favor of the claim.
- Expert Testimony: In some cases, an expert may be able to provide an opinion on the cause of death, especially if there are ambiguities surrounding the circumstances. If an expert can attest that the suicide was a result of untreated mental illness or severe emotional distress, it may strengthen your case.
Life Insurance Denial Statistics
20%
The annual average number of life insurance claims denied.
$50 Million
The yearly average dollar amount of claims denied by life insurance companies.
.2%
The number of claims appealed annually by consumers.