Assessing the impact of suicide exclusion periods on life insurance.
BACKGROUND
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.


OBJECTIVE
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.
Yip
Paul
P
Centre for Suicide Research and Prevention and Social Work and Social Administration Department, The University of Hong Kong, P. R. C. sfpyip@hku.hk
Pitt
David
D
Wang
Yan
Y
Wu
Xueyuan
X
Watson
Ray
R
Huggins
Richard
R
Xu
Ying
Y
D000293:Adolescent; D000328:Adult; D000367:Age Factors; D001315:Australia / Q000453:epidemiology; D005260:Female; D006801:Humans; D007352:Insurance, Life / Q000191:economics / Q000706:statistics & numerical data; D008297:Male; D008875:Middle Aged; D012737:Sex Factors; D013405:Suicide / Q000706:statistics & numerical data; D013997:Time Factors; D055815:Young Adult; D000092864:Suicide Prevention