Canadian finance blog Financial Highway is running a a financial mythbuster series, and the latest entry tackles life insurance.
One of his more surprising bullet points is that suicide is typically covered:
Life Insurance Won’t Pay If You Commit Suicide
This myth has been brought about mainly by movies; the fact is that suicide is often not directly excluded from life insurance policies. Often there is an exclusion period for suicide; in Ontario (and most of Canada) this period is two years. If you commit suicide within the first two years of your policy inception then no payout will be made, if it is past the two years then your full face value is paid out (assuming everything else is remains the same).
The post also says it’s foolish to think you should divert your money to investments rather than life insurance, and to think that all life insurance policies are the same so it’s not necessary to read your individual contract.
What’s your philosophy on life insurance?
Insurance Myths Debunked Part 2 – Life Insurance [Financial Highway]