About Scott R. Graves Expertise I can answer questions about life insurance, health insurance, long term care insurance, supplemental health insurance, Medicare and Medicare Advantage questions, and annuities. I am the lead trainer and recruiter within my agency, if you are a person interested in the business or new in the business and may have questions, I will be happy to answer them for you. We work with independent agents, as we are not a captive agency.
Experience I own an insurance agency in Oklahoma and have been in the business for over 8 years. We specialize in hard to place cases. In other words, people with pre-existing health conditions; such as cancer, diabetes, heart conditions, and overweight. I also do Estate Planning and give seminars on the subject.
Question QUESTION: If a person buy term life insurance in New York and commit suicide, do his life insurance pay to the relatives?
Thank you (I am not going to commit suicide is just that a friend says yes and I believe not)
ANSWER: In a life insurance contract (policy) there is called a "Compensability Clause". This clause is pretty much limited to suicide. It usually states that if the insured, anytime in the next 24 month time period (2 yrs) dies because of self inflicted (wounds, accident, there is usually a long list of words including suicide), then insurance company is not obligated to pay the face amount of the policy. In other words, not just NO, but Heck NO!! Companies will pay back, to the named beneficiary, the amount of premiums the insured has paid, and that is it.
I hope you had money on this one. Thanks for using Allexperts.com.
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QUESTION: What happened if the person suicides after the 24 month period?
Thank you (I am winning this one and its against my brother in law lol)
Answer Once the two year contestability clause has expired, the company is on the hook for the entire face amount.
Insurance companies have done this so that a person won't buy a policy with the express idea that they can commit suicide and not harm the family financially, or, buy a policy to create a large sum of money for a beneficiary, all the while planning on ending their life intentionally. Statistics have shown that if a person wants to end their life, they won't wait two years to do it.
An interesting set of events have recently happened that has caught the attention of the insurance companies. This is where a person joins a religious sect and plans to become a suicide bomber, with the idea that the insurance proceeds can help fund the cause. Insurance companies are going to protect themselves. I wouldn't be surprised to see some changes in the near future.
