Does Life Insurance Cover Suicide in India?
When families buy life insurance, they usually expect financial security no matter what happens. But one question that often comes up — and sometimes at the most sensitive times — is: what happens if the policyholder dies by suicide? Will the insurance company still pay the claim?
The answer isn’t a simple yes or no. In India, the rules are shaped by IRDAI (Insurance Regulatory and Development Authority of India) regulations, the Insurance Act, 1938, and the type of policy you hold. Let’s break this down.
IRDAI Guidelines and the Suicide Clause
Every life insurance policy in India comes with a suicide clause. This clause sets out how claims are handled if the policyholder dies by suicide.
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Within 12 months of policy start or revival:
The insurer does not pay the full death benefit. Instead, the nominee may receive:-
80% of the premiums paid, or
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the surrender value of the policy (whichever is higher).
Taxes, rider premiums, and bonuses are usually excluded.
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After 12 months:
The full sum assured becomes payable, just like in any other natural or accidental death case.
This rule ensures a balance: families get some financial relief, but insurers are also protected from immediate misuse of policies.
Pre-2014 vs. Post-2014 Policies
There’s an important historical shift to know:
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Before 1 January 2014: If suicide occurred within 12 months of the policy start, most insurers denied any payout at all.
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After 1 January 2014: IRDAI updated the regulation so that families at least receive partial compensation (80% of premiums or surrender value).
So, if your policy was issued or revived after 2014, the terms are more supportive.
Coverage Across Policy Types
Different life insurance products treat suicide differently, though all follow the 12-month waiting period rule.
1. Term Insurance
For pure protection plans:
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Suicide within 12 months → nominee gets 80% of premiums paid (or surrender value).
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Suicide after 12 months → nominee gets the full sum assured.
2. ULIPs (Unit Linked Insurance Plans)
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Suicide within 12 months → nominee receives only the fund value.
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After 12 months → regular benefits apply.
3. Endowment & Traditional Plans
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Similar to term insurance — partial refund in first year, full coverage after that.
4. Group Life Insurance
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Employers or associations offering group cover also apply the same waiting period.
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Terms may vary slightly, so it’s worth checking the master policy.
The Role of Section 45 of the Insurance Act
Under Section 45 of the Insurance Act, 1938, insurers cannot deny claims after a policy has been active for three years, except in proven fraud cases.
This gives families extra legal protection — suicide can’t be used as an excuse to reject valid claims after this contestability period.
Claim Process in Case of Suicide
If a family needs to raise a claim in such a situation, the process is the same, though it may require additional documents:
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Inform the insurance company immediately.
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Submit the claim form along with:
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Policy document
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Death certificate
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Identity/address proof of nominee
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Medical or police records (if required)
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The insurer reviews the claim based on the policy’s suicide clause.
A common mistake is assuming unpaid premiums or a lapsed policy will still qualify — but if the policy was not active, no claim is payable.
Suicide Clause vs. Contestability Period
Many confuse the two. Here’s the difference:
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Suicide Clause: Always applies for 12 months from policy start/revival.
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Contestability Period: A broader 1–3 year window where insurers can investigate misrepresentation or fraud.
They are separate, but both affect claim outcomes.
Mental Health and Legal Context
It’s important to highlight that suicide is no longer treated as a crime in India. The Mental Healthcare Act, 2017 decriminalised suicide attempts, recognising the need for care rather than punishment.
This shift has also encouraged insurers to be more transparent about mental health disclosures in policies.
💡 Note: If you or someone you know is struggling with suicidal thoughts, you can call India’s mental health helpline at 988 for immediate support.
Frequently Asked Questions
1. Does life insurance cover suicide in India?
Yes, but only after 12 months of policy commencement or revival.
2. What happens if suicide occurs within 12 months?
Nominee usually gets 80% of premiums paid, or surrender value — not the full cover.
3. Are there differences between term, ULIP, and endowment policies?
Yes, ULIPs pay fund value, while term and endowment policies follow the 80% refund rule.
4. What if the policy is more than three years old?
Section 45 of the Insurance Act prevents insurers from denying claims unless fraud is proven.
5. Do all insurers follow the same rule?
Yes, IRDAI makes it mandatory, but minor wording differences exist across policies.
Final Word
Life insurance does cover suicide, but with clear conditions. If it happens within 12 months, families may not get the full payout — only a refund of premiums or fund value. After that period, however, the full death benefit is payable.
The key takeaway? Always read your policy document, understand the suicide clause, and don’t hesitate to ask your insurer for clarity. And beyond finances, remember: mental health matters. Help is available, and reaching out can make all the difference.
Is suicide covered under life insurance in India?
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