Life Insurance covers the risk of the commission of suicide
Parul Madaan 15 Jul 2020

Life Insurance covers the risk of the commission of suicide

A life insurance policy is generally taken by someone to ensure that their family remains financially independent after the policyholder dies in case of sudden misfortune. But it gets very challenging for the family to deal with such an unforeseen situation and to the lose only financial security in the form of insurance policies due to the absence of suicide from being covered by the policy measures only increases the difficulties of the family. So, the insurance regulator IRDAI (Insurance Regulatory and Development Authority of India) has incorporated changes to the suicidal provision that have been in effect since 1 January 2014.

As per the World Health Statistics 2019 published by World Health Organization (WHO), India’s suicide rate in 2016 was 17.8 per 100,000 people, much higher than the global suicide rate of 10.5 and the causes of suicide deaths in India have indeed been linked to factors such as economic debt, mental issues, education and lower fertility rates.

In the case of Faquir Singh v. Union of India AIR 2002 J&K 62, an insured person died due to the use of a rope around the neck that caused cardiac failure. The court held that it was inappropriate to deny the benefit of postal insurance to the father of the insured whose death occurred as a result of committing suicide. 

In case of Northern India Assurance Co. v. Kanhayala,(1938) Lahore High Court, 561, the insured person committed suicide within 13 months. So, the court held that committing suicide is not a felony in India and the benefit of postal insurance were to be given to the family.

As life insurance policies focus on providing suicidal death coverage after a period of one year. However, if the policyholder commits suicide before a time frame of one year, then the nominee may not be able to benefit from the full amount of insurance. Rather, the insurer may need to provide the family with a benefit equal to a certain percentage of the premium paid during the term of the policy.

However, all this vary depending on the terms of policy. The restriction on payment of the amount insured in cases of suicide before the end of 12 months helps insurance companies to prevent insurance fraud. There may be instances where the insured person has incurred a huge debt and wants to get out of this circumstance first by purchasing insurance policy and then committing suicide.


The sole reason for offering suicidal death insurance is to assist the emotionally devastated family members by paying them a certain amount (as per the clauses) out of the premium paid by the departed family member. If the insured person commits suicide within 12 months of the issue of the policy term, the nominee is not allowed to obtain full death benefits, but the insurer can only pay the nominee a benefit equal to a certain percentage of the premium paid during the policy term by the policyholder. Likewise, if the policyholder commits suicide within 12 months from the date of the planned renewal, the nominee shall receive just 80 per cent of the premiums paid as a death benefit.

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