In New York or anywhere in the world, the loss of a loved one is often a shock, even if that person had been suffering a prolonged illness. However, perhaps the most upsetting loss a family can face is when someone dies by an act of suicide. This unimaginable event may be even more difficult to bear if the deceased's life insurance policy claim is denied by the insurance company.
It is not always true that a life insurance company will deny a claim if the cause of death is suicide. It is important for policyholders to review and understand their policies so they know if they are covered in the event of this unthinkable tragedy. A life insurance policy will typically have an incontestability clause, and some will also carry a suicide provision.
The incontestability clause covers a broad range of causes of death, including suicide. Usually lasting two years, the incontestability clause allows the insurer to contest and potentially deny any claim made within that time. After the incontestability period elapses, the insurer is not as likely to deny a claim except in cases where fraud is suspected.
Similar to the incontestability clause, the suicide provision usually lasts two years, though some may be longer. This prevents someone from purchasing insurance with the intent of committing suicide. However, insurers understand that families of those who die in this tragic manner should not suffer further. After the provision ends, many insurers will accept a claim following a death by suicide.
The important point is that policyholders understand the provisions and exemptions in their policies. New York laws, insurance company standards and unique circumstances can allow policies to vary. When a policyholder disputes the denial of a claim, it may be necessary for the insurer to seek the counsel of an attorney.