Assessing the impact of suicide exclusion periods on life insurance

Yip, P, Pitt, D, Wang, Y, Wu, X, Watson, R, Huggins, R and Xu, Y 2010, 'Assessing the impact of suicide exclusion periods on life insurance', The Journal of Crisis Intervention and Suicide Prevention, vol. 31, no. 4, pp. 217-223.


Document type: Journal Article
Collection: Journal Articles

Title Assessing the impact of suicide exclusion periods on life insurance
Author(s) Yip, P
Pitt, D
Wang, Y
Wu, X
Watson, R
Huggins, R
Xu, Y
Year 2010
Journal name The Journal of Crisis Intervention and Suicide Prevention
Volume number 31
Issue number 4
Start page 217
End page 223
Total pages 7
Publisher Hogrefe Publishing Corp
Abstract We study the impact of suicide-exclusion periods, common in life insurance policies in Australia, on suicide and accidental death rates for life-insured individuals. If a life-insured individual dies by suicide during the period of suicide exclusion, commonly 13 months, the sum insured is not paid. Aims: We examine whether a suicide-exclusion period affects the timing of suicides. We also analyze whether accidental deaths are more prevalent during the suicide-exclusion period as life-insured individuals disguise their death by suicide. We assess the relationship between the insured sum and suicidal death rates. Methods: Crude and age-standardized rates of suicide, accidental death, and overall death, split by duration since the insured first bought their insurance policy, were computed. Results: There were significantly fewer suicides and no significant spike in the number of accidental deaths in the exclusion period for Australian life insurance data. More suicides, however, were detected for the first 2 years after the exclusion period. Higher insured sums are associated with higher rates of suicide. Conclusions: Adverse selection in Australian life insurance is exacerbated by including a suicide-exclusion period. Extension of the suicide-exclusion period to 3 years may prevent some "insurance-induced" suicides - a rationale for this conclusion is given.
Keyword(s) Australia
age-standardized mortality rate
life insurance
suicide-exclusion period
suicide rate
DOI - identifier 10.1027/0227-5910/a000023
Copyright notice © 2010 Hogrefe Publishing
ISSN 0227-5910
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