In the last month there has been considerable focus on the right of those who are terminally ill to end their own lives. A court recently granted a terminally ill man, Robin Stransham-Ford, the right to end his life. He passed away before he was able to undergo assisted suicide, but the decision by the court has a significant impact on how we view the rights of those who are terminally ill to end their own lives.
This week I was asked about the impact this decision would have on life insurance. Having thought through this, I think that life insurance in South Africa is reasonably well set up enough to handle the impact of assisted suicide. Here’s why:
- Two year exclusion on suicide
This may surprise most South Africans who work outside of insurance, but most underwritten, individual, life insurance policies in South Africa will pay out for deaths as a result of suicide (assisted or otherwise) if the suicide takes place after the first two years of the policy. So anyone who has had one of these life policies for more than two years will not have their life claim declined by the insurer if they choose to undergo assisted suicide.
- Terminal illness accelerator
So, what happens if I need to undergo assisted suicide in the first two years of my policy? Most life policies also pay out while the life insured is still alive if they are diagnosed with a terminal illness which, in the opinion of the insurer, will result in the insured’s death within the next 12 months. While not all those who would choose assisted suicide would qualify under this definition, it does provide an option for life insurers to pay out before the insured dies. So where the insured chooses to undergo assisted suicide in the first two years of the policy, the terminal illness accelerator may provide them with an option to still claim on their policy.
- The impact of underwriting
The case that now needs to be considered is where the insured chooses assisted suicide in the first two years of the policy that doesn’t qualify as a terminal illness. We need to remember that lives are medically underwritten upfront which means that they have passed some minimum health standard. This reduces the chance of anyone suffering a condition that results in them choosing assisted suicide in the first two years of the policy.
Practically though, I would think the insurer would make some sort of concession if a policyholder underwent assisted suicide in the first two years of a policy as a result of a legitimate health condition. It might be as simple as reducing the benefit pay-out by the premiums that would be owed from the date of death until the second policy anniversary of the policy.
I would assume that the above points mean that underwritten life policies are (more or less) set up to allow for assisted suicide. I wouldn’t be surprised to see some insurers introducing policy wording clarity around assisted suicide in the future though.
- Other concerns
Life cover outside of the individual, underwritten space may have different terms regarding suicide.
Some countries who are grappling with the assisted suicide issue are also considering whether they would allow assisted suicide for those who have purely psychological issues. If they were allowed, I am not sure how insurers would view an assisted suicide as a result of a psychological condition.