The 2-year clause is something all life insurance policies have. It can also impact the claims process and affect whether the people you have listed as beneficiaries will be able to receive the payout or not. Is it another form of red tape by insurers or a safety measure to protect everyone involved? Here is what you need to know.
What is the 2-year clause?
Insurers focus on protecting you and the people you care about. There are a set of guidelines you will be informed of in terms of things that are covered and not covered by your insurer. One of these clauses is that an insurer will not cover death resulting from suicide within the first 24 months (2-years). Should a policy holder die due to suicide during the first 2- years of having their policy, an insurer can deny a claim. Therefore, it is important to carefully read the terms and conditions that come with your policy, especially the exclusions to avoid any surprises.
Why do insurers include this clause in policies?
Insurers understand that there are people who are faced with mental health illnesses. Studies have shown that One-fifth of South Africans will experience depression once in their lifetime. It is possible to get life cover even if you have a mental health illness, however, this will be based on the severity of the illness.
Due to the various ways in which people pass on, insurers need to protect themselves and policyholders from people who would want to ‘cheat the system’ so that a claim could be paid out.
Exclusions such as the suicide exclusion are put in place to protect the policyholder (the person whose name the cover is in) and the insurer. For example, it is to avoid someone taking out a policy worth millions of rands just days before committing suicide, leaving the insurer to pay out a large lump sum with having only collected one monthly premium.
Why ‘how you die’ affects your policy?
When it comes to security measures being put in place, the 2-year clause acts as a protective barrier. Therefore, how you die plays a big part in the claims process. Your insurer will take you through a list of things that they do not cover. Most of these are a list of things that you willingly participate in that could place your life in danger. Other exclusions outside of the 2-year clause include:
Other considerations
While it is still possible for you to get cover even if you have been diagnosed with a mental health illness, it is important to ask your insurer any questions regarding your policy exclusions. Mental health is an illness that affects all of us in one way or another. Reaching out for help to a professional and finding a support system is how you can find effective ways to deal with a mental health illness. You matter! If you are suffering from depression or feeling suicidal please contact the 24/7 SADAG suicide helpline on 0800 567 567 for free counselling, information, or referral to resources.
