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Should employers consider a suicide exclusion as a deterrent to those motivated to buy mortgage protection insurance specifically because of suicidal thoughts?

In 2009 suicide and possible suicide, as indicated by the codes “intentional self harm” and “events of undetermined intent” in the Office for National Statistics reports for England and Wales, accounted for 4.5 per cent of deaths at ages 25 to 64.  If we consider ages 25 to 39, this figure increases to 16 per cent.  Compared to other causes of death, suicide is a relatively rare event.  While not catastrophic, a significant increase in suicides can introduce additional claims costs for insurers, explains review site Mortgage Protection Quotes.

Currently insurers reduce their risk exposure by trying to identify factors at an underwriting stage that suggest an increased risk of suicide.  Many insurers use a suicide exclusion as a deterrent to those motivated to buy mortgage protection because of suicidal thoughts.  Suicide exclusions are difficult to apply at claim stage because there is seldom incontestable proof that the decreased intended to kill themselves.

Suicide remains a relatively rare event which is difficult to predict.  Insurers need to balance cost containment against reputation risks and ensuring that the underwriting process is sensible for the majority of customers.

Filed under: Insurance by The Web Clinic