Research findings have concluded that the suicide exclusion period on life insurance policies should be increased to three years.
This recommendation was reported within a recent edition of CommInsure’s weekly Did You Know? series, where CommInsure’s Executive Manager Business Growth Services, Jeffrey Scott, considers the tragic facts about suicide in Australia.
Within the article, called Suicide – the need for exclusion, Mr Scott refers to recent research that:
- Indicates there is a strong correlation between higher sums insured and suicides
- Suggests a strong correlation between the end of the suicide exclusion period of 12 months and increased suicide rates
Because of these findings, the research concludes that suicide exclusion periods, which typically apply for the policy’s first 12 or 13 months at present, should be increased to three years.
Mr Scott suggests that increasing suicide exclusions to three years would eliminate any adverse anti-selection and offer more options, over a longer period of time, for the individual to find other answers to their predicament.
In his article, Mr Scott also outlines a number of facts about suicide in Australia that make for sobering reading:
- Suicides account for approximately 1.5 per cent of the 143,946 deaths that occurred in Australia in 2008
- For males aged 25-44, suicides are the number one cause of death
- Suicides are ranked 10th for the cause of male death for all ages
Mr Scott says that if this research recommendation is adopted by reinsurers and life insurance companies, we may see longer exclusion periods being adopted for life insurance policies being issued in Australia, for both new individual retail and group insurance products.
Advisers can click here to read the full article: Suicide – the need for exclusion.
