Suicide and Life Insurance: A Comparative Analysis of Judicial and Legislative Response

Abstract

Whether an insurer would be liable for death due to suicide of the policyholder and what would be the impact of the suicide clause, which excludes an insurer’s liability in case suicide has been committed within a specified time frame, on insurer’s liability if the suicide was committed outside the time agreed time period? This question was subject to much speculation but rarely did the courts get the opportunity to decide upon the question. Unfortunately, when the opportunities did present themselves, the courts were usually guided by considerations which were not appropriate. Instead of looking upon the life insurance policy as a combination of property and insurance for a contingency, they were looking upon it as purely as an insurance and so were guided by considerations which, though appropriate for a typical property insurance, had the potential to cause injustice, as the English courts probably laid the ground for till the law reform in form of Suicide Act. When the Indian courts realized the potential for injustice in the formulation of law laid down by the House of Lords, instead of facing the issue of nature of life insurance head on, we were confronted with legal pyrotechnics as to non-criminal nature of suicide in India. This paper seeks to look into the difference in approach of English and Indian courts on the issue, missing links in their reasoning and subsequent statutory/regulatory developments and their possible effects.