How many times have you heard it, whether on TV or movies or real life: life insurance doesn’t pay out in cases of suicide. Whether it’s the long-passed-away father from a superhero’s origin story or the sad real-life protagonist of a true-crime caper who tries to arrange his/her own murder so that his heirs get the big payday, everyone knows that life insurance doesn’t pay out if the insured takes his/her own life, right?
Wrong, actually. The TL;DR version is this: usually the insured has a period of two years, sometimes three, after the inception of the policy during which the policy won’t pay out in case of suicide. But after that, it pays out just like it would via any other death. But read on for the interesting story behind it all.
for the first two years (sometimes three) after policy inception, the policy won’t pay if the insured ends his/her own life. but after that initial waiting period, suicide is almost always covered.
That’s correct: In most US jurisdictions, the standard exclusion period during which a life insurance policy will not pay out if the insured dies by suicide is typically two years from the start of the policy. After this two-year window, the policy’s beneficiaries are usually entitled to receive the full death benefit, even if the insured’s death is ruled a suicide. Outside the U.S., some regions may have slightly different exclusion periods—often one or two years—but the two-year timeframe is by far the most common.
But it wasn’t always this way. In the 19th and early 20th centuries, many insurers took a much harsher stance. Policies often contained a permanent exclusion on suicide, meaning the death benefit would never be paid if the insured died by their own hand, regardless of how long the policy had been in force.
Key Historical Shifts
- 19th Century Permanent Exclusions:
Early U.S. life insurance contracts often labeled suicide as “self-murder,” reflecting prevailing religious and moral attitudes at the time. Insurance, after all, was for protection against unforeseen events, but suicide was planned. As a result, most policies simply refused to pay in the case of suicide, regardless of when the policy began. - Gradual Introduction of Time-Limited Clauses (Late 19th – Early 20th Century):
Over time, as the life insurance industry matured, companies began rethinking their absolute prohibitions. Recognizing that permanent exclusions contributed to distrust in the industry and could seem unjust, insurers introduced limited “suicide clauses.” These clauses stipulated that the policy would not pay the full death benefit if the insured died by suicide within a certain time frame after the policy’s inception. Initially, this period could vary widely—some policies might set one year, others might set two, and some companies offered return of premium rather than a complete denial of benefits during that window. - Standardization and Regulation (Mid-20th Century):
By the mid-20th century, industry practices and state regulations gravitated toward a more uniform approach. Two-year exclusion periods became increasingly common, in large part due to evolving legal standards and consumer protection laws. Regulators and courts often supported this standardized period, arguing that it struck a fair balance between protecting insurers from those with immediate suicidal intent who wanted a quick and easy way to make their heirs wealthy, and ensuring that those beneficiaries who clearly became suicidal many years later, were treated fairly by their policies (meaning, they paid out). - Modern Standard Practice:
Today’s norm—where a life insurance policy includes a two-year suicide clause—is the product of these historical developments. Instead of permanent exclusions, modern policies almost universally allow full payouts after the initial contestability period, generally around two years, reinforcing consumer trust and fairness in the system.
Why bring it up?
Because it’s true, and because society at large has a flawed understanding of how the system works, no thanks to the combined efforts of Hollywood and shoddy journalism that peddle a different reality. Obviously the point of making the truth clear is not to encourage anyone to end his/her own life; it’s to ensure that those beneficiaries who are entitled to a death benefit from their insurance company actually receive it. We all know that insurance companies won’t go the extra mile to ensure you get money you didn’t ask for; they’ll actually do anything in their power to deny paying you anything at all.
And now you know the truth; life insurances almost always do, in fact, pay out in cases of suicide.
KNOWING the truth about these policies ensures that families entitled to a death benefit will actually receive it.
