My friend and I have a morbid debate. Can a family redeem your life insurance policy if you commit suicide?

Sad story, however...this could be considered as fraud depending when the insurance was taken out...

Most insurance companies have exclusions where a claim will be denied if, the death occurs as a result of commiting a criminal offense or committing suicide within the first 2 years of the policy. Some companies extend the suicide clause past the 2 year period. These clauses have been put into place becuase of fraudulant acts like this...person takes out life insurance to and then commits suicide the next day to save his family from financial ruin. Some cases they will just refund the premiums paid, some cases they will take the matter to court as a fraud case.

Well it's not fraud to take out a policy and kill yourself. You just don't get paid because of the exclusion. If it's an individual policy there will be a two year exclusion and the insurance company won't pay out during that time frame. It has nothing to do with mental illness or anything along those lines because even if the person had mental illness prior to taking out the policy there is also only a 2 year contestability clause in most policies.

So, yes if she had an individual policy for more than 2 years it'll pay out. BUT, if she had a group policy it may not. (granted there are exceptions, but generally speaking that's how it works)

in a lot of cases, if the person dose not have a history of mental illness and the insurance policy is in effect for over a (i think if i can remember right) 3year time period, it will cover and pay out. my godson, had a policy for 5 years, went into a depression after losing his kids in a custody fight, (her parents had money, she was a dope head) 4 months later he shot himself. his wife and stepdaughters received his full policy payout and also the home mortgage life also paid out, they owned the home for 2 1/2 years. he had no history of any depression or mental health problems, the insurance companies requested medical records from the phys to confirm this.