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Does Life Insurance Cover Suicide in Australia?

Russell Cain
Russell Cain Updated: 18 June 2021

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Many Australian life insurance companies do cover suicide after a specific exclusion period. However, it is important to refer to your product disclosure statement (PDS) to make sure you understand the terms and conditions surrounding cause of death and what constitutes a valid claim should you ever need to make a claim related to a death by suicide.

Suicide has become one of the most common killers of Australians. According to the Australian Bureau of Statistics (ABS), suicide does not discriminate based on ethnicity, age, or gender. Around 3,000 people commit suicide each year and it is the main cause of death in people between the ages of 15 and 49. Suicide is also the third leading cause of premature death.

The pain you feel when surviving the intentional death of a loved one is made worse when that loved one’s income was contributing to maintaining their family unit. Which is why it’s essential to understand all of the details surrounding life insurance and suicide.

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Does life insurance cover suicide?

Yes, life insurance generally does cover suicide after a specific exclusion period. Generally, this period depends on your policy and the specific insurer. Usually, your claim will be declined if you were to deliberately kill yourself within the exclusion period after your policy has started or been re-instated. However, certain Direct and Group policies may exclude claims related to suicides for longer or indefinitely.

It’s very important that you carefully review your cover and read through your product disclosure statement (PDS) to ensure your have life insurance will pay out on your claimshould your death be self-inflicted after the specified exclusion period. While many insurers will pay a death benefit due to suicide after the exclusion period, most insurers will not cover you for Trauma, TPD or Income Protection if the claim was due to a self-inflicted injury or attempted suicide.

Can You Get Life Insurance If You’ve Attempted Suicide?

Yes, if you’ve attempted suicide in the past and have recovered from the suicidal thoughts, you may still be able to get sufficient coverage. However, it’s important to note that it will typically be more difficult to find cover but not impossible. When you apply for a policy, the insurer will typically assess your risk factors to decide whether they’ll provide you with cover.

Applying for life cover after a suicide attempt

Attempted suicides are a very serious risk factor that most insurers will take into careful consideration before providing you with cover. They might ask you to provide the following information while assessing your risk:

Based on the above information and your completed application form, the company will assess your risk.
They might accept your application as is, request an additional premium or decline your application entirely. It depends largely on your personal situation and the insurer’s underwriting guidelines around this condition.

Should I submit a claim if my spouse commits suicide?

Yes, you should lodge a claim with your insurer for a death benefit if your spouse took their own life. Whether your claim gets paid will generally depend on the following:

  • Your spouse met the terms and conditions outlined in their PDS, including the suicide clause,
  • Your partner fully complied with their duty of disclosure, informing the insurer of all medical and personal information at the time of application, and
  • The policy is still in force and you are nominated as the beneficiary on your partner’s policy.

If you are not the nominated beneficiary, then the executor of the Estate will generally need to lodge the claim on behalf of the estate.

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When does life insurance not pay?

There are several instances when insurers may decide not to pay out on your cover. Which is why it’s extremely important that you carefully review the PDS and make sure you’re aware of the exclusion clauses in the policy terms and conditions, preferably before purchasing a life insurance policy.

Some instances when insurers may not pay out on a policy include:

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Understanding the exclusion period

In the past, life insurance companies did not understand mental health or suicide very well. Treatment was limited and proper support services almost non-existent. As a result, suicide was excluded from life policies and families were not paid a claim when their loved ones passed away as a result of suicide.

We’ve learned a lot about depression and mental health issues in the last few years. Today, most life insurance companies do cover suicides in Australia. However, there are still specific conditions applied to obtaining life insurance that pays out if the policyholder were to commit suicide.

Retail (Advised) policies generally enforce a 13 month exclusion period if the life insured’s death is the result of suicide. However, the exclusion period is dependent on your specific policy, and you should carefully review your PDS to determine the exclusion period.

Why exclude suicide from life insurance?

The suicide clause ensures that people contemplating ending their lives do not take out a policy just before carrying out the act. If this were allowed some people might consider killing themselves as a means of providing for their family during times of financial hardship.

The intention behind the exclusion period is also to delay people from acting on their suicidal thoughts. Generally, people won’t plan their suicide, wait a couple of years then go through with it. Usually, something in their lives would have made them change their minds by then.

Take note: Not all life companies follow the same rules and clauses, and generally differ from policy to policy, even under the same brand. It’s important that you know what is and is not covered by your policy by referring to the specific product disclosure statement.

Does life insurance cover drug overdose?

If you were to die as a result of a drug overdose, whether intentional or by accident, your death benefit might not pay out. However, this depends on several factors, including how the drug overdose happened and the type of life insurance coverage you have.

A death benefit might be paid out in the case of a drug overdose after the exclusion period had passed and if there is no evidence that you had a drug habit before or during your insurance application.

To determine whether your policy covers a drug overdose, please refer to your policy disclosure statement.

Who investigates the death to determine suicide?

When a life insurance claim has been made, proof of death and the circumstances surrounding it lies with the beneficiary or policy owner. Meaning, you need to provide evidence that the insured has indeed passed away.

Generally, because suicide is labelled “death due to unnatural causes”, it is likely that an autopsy will be performed. Similarly, if death was due to a strange circumstance, for example, a car accident, you might also be required to include the police report and or coroner’s report when lodging a claim.

You need to include the following information when lodging a life insurance claim:

  1. Death certificate.
  2. Fully completed claim forms.
  3. Medicare and Pharmaceutical Benefits Scheme Release forms.
  4. General Medical History Release forms.

What are the suicide rates in Australia?

Australian suicide rates have increased to an alarming number, with an average of 3,027 people taking their own lives in 2015, that’s 909 more people than in 2006. The Australian Bureau of Statistics showed that the majority of suicides were males (75%) and that the Northern Territory had the highest rates of suicide with 21 deaths per 100,000 people.

For the people left behind, suicide is much more than mere statistics, it’s a heart breaking reality and can often lead to financial ruin. Families are in financial distress, trying to juggle the monthly bills with one less income.

If you or someone you know is thinking of suicide, there is immediate help. Contact the Suicide Helpline Australia for assistance on 13 11 14 or visit their website at lifeline.org.au.

Before buying a life insurance policy, the best thing to usually do is shop around and compare the different companies in the market. By comparing various policies and companies, you might find the right one for you and your specific situation.

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