Does life insurance cover all causes of death?
Pedro Martínez was a mechanical engineer and worked in an American multinational. Last summer, his company assigned him for two years to one of its branches in the Middle East.
Before leaving, Pedro, who was the father of two college-age children and was paying the mortgage on his house, took out term life insurance for a period of 10 years. The engineer’s purpose was to leave his family as protected as possible, in case something bad happened to him.
A month ago, Pedro’s body appeared in the garden, three floors below the balcony of the hotel room where he was staying. After a short investigation, the Qatari police report concluded that the engineer Martínez had committed suicide.
After the funeral, when Pedro’s wife tried to collect the life insurance benefit, the insurance company denied her coverage, claiming that “the suicide had occurred 10 months after taking out the policy.”
“If the cause of death had been another, they could collect the $ 350,000 provided by the policy.”
“Suicide is the only cause of death that includes a grace period of one year,” the company explained.
Indeed, most life insurance covers any death regardless of the cause that causes it. But if the cause of death is suicide, coverage will be subject to suicide occurring one year after the contract is signed.