Depression & Life Insurance

"Suicide ideation" is psychologist jargon for seriously contemplating suicide. Psychologists use the technical term because it sounds erudite and occludes the fact that they spent their college years studying a field that gets debunked and reinvented every 50 years.

A person needn't actually carry out or even formulate plans of suicide to be guilty of suicide ideation, and unfortunately, if there is evidence of suicide ideation in your history, there is a chance of it standing in the way of your life insurance coverage. Depending on where you apply for coverage, suicidal thoughts may not be a problem, but it is also possible that the insurance company may deny your application or assign you to a more expensive rate class.

Concealing your suicide ideation may obviate any impairment that they would otherwise impose on your insurability. Because of the stigma on depression, concealing suicidal or otherwise depressive thoughts is just not hard for some people. US culture dictates that certain negative emotions are acceptable (e.g. anger, envy, lust), but nobody has the right to feel depressed (much less to be clinically depressed).

Being dishonest is not recommended because choosing good over evil is about the only worthwhile thing that most people can do with with their lives. However, from a practical standpoint, you will likely succeed if you conceal suicide ideation. Here's why:

A tendency toward suicide has a legitimate effect on one's mortality risk, and disavowing knowledge of it during your application process could be considered a material misrepresentation. If it's intentional, that amounts to fraud. However, if the life insurance company does not discover your fraud within the first two years of coverage, they'll never have a change to contest it afterward. They are legally bound to uphold the contract they made with you.

Suppose that you lied about your clinical depression and your insurer later learned that you had confessed suicidal thoughts to a psychologist (oh, did they tell you those sessions were confidential?). If the insurer learned the truth 2 years and 1 day after your policy went in force, you would get to keep your policy in force.

But if the insurer learned about your concealment 1 year and 364 days after the policy went into effect, they would cancel your policy (even if you had already died). That means that you would get a refund of all your premiums, and they would get a refund of all the proceeds (the death benefit, if any).

Suicidal thoughts may prevent you being approved for a new life insurance policy, but they won't void any life insurance policies that you have already in place. An integral concept in life insurance is that circumstances change, and the customer can plan for these problems by purchasing a policy that will last for a decade or more. The life insurance company doesn't get to drop you just because your mortality risk increases.

In fact, even a successful suicide won't void a life insurance policy, provided that it has been in force for two years. (See "Suicide Clause" below.)

Even if you commit suicide, your life insurance policy will still pay its promised death benefit, so long as the policy has been in force for at least two years. In some states or under some policies, this period may actually be less than two years.

A suicide clause is a provision in most life insurance policies which stipulates that the life insurance company does not have to pay a death benefit (or only pays a limited death benefit) if the insured individual commits suicide during the first year or two (periods vary) of coverage. After that period, though, there's nothing to protect the life insurance company.

Regardless of whether your policy contains a suicide clause, suicide will not void a life insurance policy after two years. Life insurance is heavily regulated by state governments, and every state in the US has laws about suicide and life insurance.

In California (where I work) §11066.h of the state insurance code states the following:

The certificate shall be incontestable on the ground of suicide after it has been in force during the lifetime of the insurance for a period of two years from date of issue.