Suicide Is Covered in Life Insurance

Life insurers have been ordered by the Financial Supervisory Service to make payouts owed to the families of clients who committed suicide, even if those families didn’t file before the two-year deadline. As of February 26, life insurers had not paid 246.5 billion won on 2,314 claims involving suicides. Of those claims, 81 percent or 200.3 billion won hadn’t been filed before the industry-wide deadline. 

The announcement by the financial watchdog on Monday came after the Supreme Court ruled on May 12 that life insurers should give the additional payouts they owed to the families of clients who committed suicide and were subscribed to certain policies with accident coverage. 

These policies mistakenly categorized suicide as a type of accident and were sold between 2001 and 2010, when the companies realized the error. 

The issue first emerged in 2012, when a man with one of the old policies committed suicide. The man’s parents discovered that his suicide was technically covered and went on to sue his insurer. 

But even after the Supreme Court ruling, the companies have delayed making the payouts by claiming many of the families failed to file claims within two years of the clients’ deaths, which is the industry-wide deadline. 

Four out of 100 South Koreans subscribed to life insurance policies died from suicides, the biggest cause of death for those in their teens to 30s, an institute's tally showed Tuesday.