Is Suicide Covered Under Life Insurance Policies in Canada?

Question from life, Is Suicide Covered Under Life Insurance Policies in Canada?

Answer from AI:

In Canada, whether a life insurance policy covers suicide depends on the specific terms and conditions of the policy. Generally, most life insurance policies have a clause known as the “suicide clause” or “two-year suicide clause.”

Understanding the Two-Year Suicide Clause

The two-year suicide clause stipulates that if the policyholder dies by suicide within two years of the policy being issued, the insurance company will not pay out the death benefit. Instead, they will typically refund the premiums paid to the beneficiaries. This clause is designed to deter people from buying life insurance with the intention of committing suicide for the financial benefit of their loved ones.

After the two-year period, if the policyholder dies by suicide, the insurance company will usually pay out the death benefit as they would for any other cause of death. However, this can vary depending on the specific terms of the policy.

Exceptions and Considerations

There are some exceptions and considerations to keep in mind:

• Policy Renewal: If a policy is renewed or a new policy is taken out, the two-year suicide clause may reset. This means that the two-year period starts again from the date of renewal or the start of the new policy.
• Material Misrepresentation: If the insurance company can prove that the policyholder lied or omitted important information on their application, such as existing mental health conditions, they may deny the claim even if the suicide occurs after the two-year period.
• Group Life Insurance: Some group life insurance policies, such as those provided by employers, may not have a suicide clause. However, this varies by policy.

Seeking Legal Advice

If you or a loved one are dealing with issues related to suicide and life insurance, it’s important to consult with a legal professional. They can provide personalized advice based on your specific circumstances and help you understand the terms and conditions of your policy.

If you’re struggling with thoughts of suicide, it’s crucial to seek help immediately. You can reach out to the Crisis Services Canada for support.

Remember, life insurance policies are complex legal contracts, and their terms can vary widely. Always read your policy carefully and consult with a legal or insurance professional if you have any questions or concerns.