Suicide, Self Inflicted Injury and Insurance

Sadly, a friend of the directors of this firm took their own life over the festive season.  Apart from the obvious sadness and condolences to family and friends, this also set us thinking about a subject that we had not thought about since our early professional examinations and qualifications in life assurance law, tax, and practice.  The subject being suicide and self-inflicted injury.

For any prudent insurance underwriter, it was and still is not sensible to allow people to benefit from any fraudulent or self-harming activity that may create a financial claim.  Of course it is not.  That said, back in history it was commonplace with life insurance.

‘Gambling Act’

Back in the 18^th Century, there was no requirement to have a financial interest or even know somebody to take out life insurance on them.  It became a form of gambling where you would insure someone at high risk such as people in the military or the ‘public eye’ in the ‘hope’ that they would be killed, and you profit from the life insurance you had taken out in their name.  The Life Assurance Act 1774 stopped this.  The Life Assurance Act 1774 became better known as “The Gambling Act”.  After 1774, it became a requirement to prove ‘insurable interest’ in the person whose life was being insured i.e., you had to prove that you would suffer financial loss if someone died, this may be you, your loved ones, your employer, your creditor etc.

Mental Health

Suicide, self inflicted injury, depression and mental illness have sadly been commonplace for thousands of years and today they appear to be more prevalent than ever.   Clearly, insurers do not wish people to profit from someone taking their own life or self inflict injury that causes them to either die and have life insurance paid out or be unable to work and claim on sickness or accident income protection insurance.  That said, under the Mental Health Act, insurers cannot simply use this as a defence to void a claim or not accept cover.  Careful consideration must be made if you suffer from anxiety, depression, or severe stress.  If you are being treated and/or on medication you should still be able to secure insurance cover, albeit premiums may be ‘loaded’ i.e., more expensive but many insurers will still offer cover you.

Prudent Underwriting Clauses

• Suicide Clause:  Insurers will cover people but there is usually a 12-month suicide clause.  In short, if you commit suicide withing 12 months of starting a policy, you will not be covered.  This clause applies to all policyholders and does not discriminate against any one individual.
• Self Inflicted Injury:  If you inflict harm on yourself that results in injury or death (within 12 months), insurers will usually void your claim.  Even if, for example, you a drink/drug driving and you injure yourself or die, you would not expect an insurer to pay out on a life insurance or accident insurance claim.
• Hazardous Sports, Activities and Occupations:  If you partake in a high risk activity such as parachuting, cliff diving or wing walking or if you work in deep sea diving on oil rigs, then there are questions on the application form and if you fail to disclose these and then you suffer an injury or death resulting in a claim, your claim may be void due to ‘non-disclosure of a material fact’ that ‘would affect the decision of a prudent underwriter in deciding whether to insure you or not.
• Coroner’s Verdict:  Insurers may go even further.  Just because a coroner may not reach a verdict of suicide but reaches an ‘open verdict’ (where there is insufficient evidence for any other verdict), insurers may still decline a claim if it is clear that actions that you took caused your own serious injury or death.

We are sorry to cover this sad subject, but it needs to be documented for all our knowledge and benefit.

Are you struggling? 

• Samaritans – Tel 116 123
• NHS – Tel 111
• Mind – Tel 0300 102 1234

There are many other charities and organisations that are available to help you if you needed whether it is physical or mental health or even if you are struggling with family, friends, abusive relationships or even ‘the bills’.  Don’t wait, get some help.

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