Employee Suicide: When Is It Covered?

We’ve all seen this scenario before, either in a movie or on the evening news. A spouse, distraught over his or her family’s crushing financial burden, decides to commit suicide so that the surviving family members can collect his or her life insurance benefits.

For Jimmy Stewart in It’s a Wonderful Life, his intended act of suicide was halted through the intervention of a guardian angel and everyone lived happily ever after. Unfortunately, this is not the way the story ends for families living in the real world.

What really happens to a family in the aftermath of a suicide attempt can be many times more devastating than the original circumstances that led to the attempt. If the attempt is successful, then the survivors may be left with a double tragedy. Not only have they lost a loved one, but what if the relevant life insurance policy will not pay benefits in the event of a suicide? Now the surviving family members are looking at even more debt because of funeral and burial costs and the deceased’s lost income.

If the suicide attempt is unsuccessful and there is no lasting injury, then the disturbed individual and his or her family are very lucky. There is no loss of a loved one and psychological counseling can be sought. Most health insurance policies will even pay for the treatment. If, on the other hand, a suicide attempt leaves the individual physically incapacitated permanently or for an extended period of time, this could spell even greater financial disaster for the affected family members. If the individual is also the primary wage earner, then the family has lost its major source of income (along with any attendant benefits) and must pay for physical care that may not be covered by any insurance policies.

The information that follows gives a brief overview of different insurance policies and what they will or will not cover in the case of a suicide or suicide attempt.

Suicide Coverage

The desperate soul who rushes out to buy an insurance policy and then immediately commits suicide is misguided in two respects: first, he or she should have sought help from a mental health professional for assistance in dealing with such self-destructive thoughts; and, second, the life insurance policy won’t pay if the suicide is committed immediately after its purchase.

Most life insurance policies have a suicide clause. Either death resulting from suicide is not covered at all or a death resulting from suicide is covered only after two years have passed since the date of the policy’s purchase. Why the two-year period? It’s thought that a clause that excludes suicide as a valid cause of death in the first two years of the policy’s life will stop someone contemplating suicide from buying the policy on impulse. There’s no immediate benefit, so they won’t buy the policy. Even if a person intent on committing suicide does buy a policy, the chances that they will still want to end their life after waiting two years is slim. There are life insurance policies that do not exclude suicide at all, but most of these plans are prohibitively expensive.

Coverage for Suicide Attempts

The most relevant type of insurance coverage for someone who has survived a suicide attempt is health insurance. Obviously, someone who attempts suicide is in need of psychological help and many health insurance plans will pay for this. Some families might be hesitant to use this benefit because of the stigma attached to suicide and may be concerned that word of the family member’s mental health problems will become the subject of workplace gossip. Fortunately, those who handle and view insurance claims in an office are bound to strict rules of confidentiality and are prohibited from discussing any worker’s medical or psychological condition. The family can seek treatment and know that word of their situation will not be spread.

If someone survives a suicide attempt but sustains injuries that are permanent or that require long-term care, the situation can be pretty grim. Most health insurance companies will not cover injuries that are self-inflicted. So, things like hospital bills, rehabilitation costs, doctor’s bills, home care attendants and all other potential medical necessities would have to be paid for by the individual who attempted suicide.