Law Offices of Connie Yi, PC
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at (925) 484-0888 or email us directly at [email protected] to schedule the consultation.

View Our Practice Areas

Whose life insurance policy is it, anyway? p.2

The death of actor/comedian Robin Williams got a lot of people thinking about a lot of things. The connection for us was the question of suicide and life insurance benefits.

Years ago, a friend of ours took his own life, as Williams did, and the family quickly found themselves mired in problems over insurance and retirement account benefits. Still reeling from the loss of their loved one, the primary earner, they sat on hold for hours to try to figure out if they would be able to make ends meet.

Life insurance policies may not pay benefits if the insured commits suicide. It sounds harsh, but in some ways it makes sense.

For example, someone could take out a policy for $1 million on Tuesday and jump off the Golden Gate Bridge on Thursday. The insurance company would have collected just the initial premium from him; without premium income, insurance companies have no investment income. Without both premium income and investment income, insurers cannot afford to pay benefits.

Still, common sense kicks in sometimes, even with insurance companies. Barring payouts for any death ruled a suicide would not go over well with regulators, much less the public. Instead, companies opted to bar these claims for the first two years that a policy is in effect.

The limit is explained in the "suicide clause" of the policy. The policy must be in effect for two full years for the company to pay the benefit of an insured who commits suicide. The catch is that each policy carries that two-year limit.

If our friend had purchased insurance five years before his death, the suicide provision would not be triggered. If, however, he canceled that policy 18 months before his death and replaced it with a new one, the suicide provision would apply: The new policy restarted the clock on the two-year limit.

A life insurance policy could also include an incontestability clause. We will talk about that in our next post.

Source: Time, "How Life Insurance Policies Deal with Suicide," John Dorfman, Aug. 15, 2014

No Comments

Leave a comment
Comment Information

Contact Us

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Email Us For A Response

Office Locations

Law Offices of Connie Yi, PC
323 Ray Street
Pleasanton, CA 94566

Phone: 925-484-0888
Pleasanton Law Office Map

19925 Stevens Creek Blvd
Suite 100
Cupertino, CA 95014

Toll Free: 888-312-6978
Map & Directions

San Francisco
490 Post Street, Suite 508
San Francisco, CA 94102

Toll Free: 888-312-6978
Phone: 415-433-3350
Map & Directions