With the coroner releasing his official report on Robin Williams’ death, new emerging revelations about dementia-inducing delusions are raising questions about the suicide clauses advisors know inside and out.
Just over a week ago the comedian’s death was officially ruled a suicide, confirming preliminary investigators suspicions. But with reports in various outlets speculating about the actor suffering from delusions brought about by dementia, it adds a new layer for brokers and advisors to consider when evaluating suicide clauses.
Two policy clauses can come into play after someone dies by his or her own hand. If either clause is invoked by the insurance company, the insured person’s family would receive no death benefit, though they would get back the premiums paid for the policy.
The suicide clause in a policy usually states that no death benefit will be paid if the insured commits suicide within two years of taking out a policy. Whenever an insured person replaces an existing life insurance policy with a new one, the time clock for the suicide clause is set back to zero and starts over again.
Also, the “incontestability clause” says that if the insured person made misstatements on the policy application, and dies within two years, the company can decline to pay the death claim. After that, the policy is “incontestable” except in cases of outright fraud.
If true, details like dementia inducing delusions muddies the water in a typical suicide clause case, allowing families the ability to claim the death benefit as well.