Does life insurance cover suicide?

Discussing life insurance and suicide can be a difficult subject to cover, however it is important for individuals to understand what is available to support loved ones during a time of dire need.

There are myths surrounding suicide and life insurance in Australia. Many people seem to believe that insurers do not pay out claims if death is a result of suicide, however this is technically untrue.

History of life insurance

In the past, life insurance companies and society in general did not understand mental health or suicide very well. There were limited treatment and support services available for those who were mentally ill.

As a result suicide was excluded from life policies and families were not paid a claim benefit if their loved one passed away as a result of suicide.

Current views on life insurance and suicide

You can now buy life insurance that will cover suicide however the policy must be held for over 13 months from the date of issue before a benefit may be paid.

This coverage has now become a standard and is generally offered by nearly all life insurance policies in Australia, however it is always best to check the PDS.

If you would like a policy that offers comprehensive cover discuss your needs with an xLife adviser.

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June 2011