“Risk” covered in a life insurance policy is “death” which may occur in any manner before the policy matures. Life insurance also covers death of the insured person from diseases, any natural cause, or even by accidents including murder and homicide.
In case of an accident insurance policy, the policy generally insures against death where the accident is a direct or proximate cause of such death.
However, any loss caused by the willful act of the insured is not covered. As a consequence, in the case of a sane committing suicide, the policy does not stand good.
But, a suicide, committed by an insane person is not considered to be a deliberate act, and hence it remains covered by the policy.
The principles relating to suicide in the LIC policy in India is that if the insured person commits suicide whether insane or not, before the expiry of one year from the date of the policy, the liability of the insurer shall remain limited to the extent of the beneficial interest of any person who is a bona fide transferee of the considerations. Thus, the sum assured is recoverable if suicide is committed after a span of one year, provided it is not opposed to any public policy.
