A couple weeks ago I shared a news report from Peter Mansbridge on Suicide attempts and insurance: Why you might not be covered. I would like to create a conversation on each of the benefits that are included in your Employee Benefit Program and the suicide clauses or lack thereof. I always recommend that you contact your Insurance Provider to confirm your contract wording.
We can start with the Life Insurance benefit under your Employee Benefit contract, which does not include a Suicide Clause. From the day an employee is insured under your employee benefit contract they would be covered if they died due to Suicide. I have confirmed this information from the Empire Life Employee Benefit contract that I deal with on a regular basis.
Where there is a 2-year Suicide clause is in an Individual Life Insurance Contract. I am taking this wording from the Industrial Alliance Life Insurance Contract, however, as mentioned above please confirm with your particular contract to confirm the wording:
“SUICIDE
Subject to the Incontestability provision of the present contract if the insured commits suicide during the 2 years following the effective date of a coverage providing a death benefit or following the date of its latest reinstatement whichever is the latest, or the effective date of any increase of a coverage providing a death benefit in which case, the restriction in case of suicide will apply only to the increase, the coverage will be treated as follows:
If the suicide is committed by an insured under:
- an Individual Coverage, or
- a Joint Coverage payable on the first death
The insurance coverage terminates and we pay the beneficiary of the insurance an amount limited to the sum of the insurance costs deducted for the coverage since its effective date or its latest reinstatement, as the case may be, less any amount already received by the applicant. OPTIONS AVAILABLE AT DEATH – NEW CONTRACT provision apply to surviving insureds of the Joint Coverage.
If the suicide is committed by an insured covered under:
- a Joint Coverage payable on the last death, paid-up on the first death, or
- a Joint Coverage payable on the last death.
The insurance coverage continues and premiums and monthly costs of insurance for this Joint Coverage still apply. For Joint Coverage payable on the last death and paid-up on the first death, we issue a Joint Coverage payable on the last death and the premium is recalculated.
If the insured who committed suicide is the last surviving Insured, the insurance coverage terminates and we pay the beneficiary of the insurance an amount limited to the sum of the insurance costs deducted for the coverage since its effective date or its latest reinstatement, as the case may be, less any amount already received by the applicant.
However, if the coming into force of a coverage directly and simultaneously results in the complete or partial cancellation of another coverage in force at the Company on the Insured, the 2-year period is calculated form the effective date or the date of the last reinstatement of the contact under which the coverage was cancelled, whichever, is the latest. If at that date the 2-year period has elapsed, the amount is payable to the beneficiary of the insurance and in such case is equal to the cancelled coverage face amount, less any surrender value that was credited or paid to you under the cancelled coverage, but without exceeding the face amount under the current coverage. If the face amount exceeds the amount payable to the beneficiary in such case, we reimburse you the portion of the insurance costs deducted for this excess amount.”
Understanding your Insurance Contract is important, contact me with any question you might have.