Life insurance is a crucial financial safety net that provides for one’s family in the unfortunate event of the policyholder’s death.
However, one of the most sensitive and often misunderstood aspects of life insurance is whether it covers death by suicide. This article aims to clarify this complex issue in the context of life insurance policies in India.
Understanding the Basics
Life insurance policies are designed to provide a lump sum to the beneficiaries when the insured person passes away. This helps cover expenses such as debts, daily living costs, and future financial needs. But does this financial protection extend to cases of suicide?
The General Rule
In India, life insurance policies typically cover suicide, but with specific conditions. According to the regulations set by the Insurance Regulatory and Development Authority of India (IRDAI), most life insurance policies include a clause that addresses suicide.
The Waiting Period Clause
The key condition to understand is the “Waiting Period.” This is a duration, generally one year from the commencement of the policy, during which death by suicide is not covered. If the policyholder commits suicide within this period, the insurance company is not liable to pay the death benefit. This clause is intended to discourage individuals from purchasing life insurance with the intent of committing suicide shortly after.
