Insurance Cover Limitations related to Suicide; the Foxconn perspective
By Ben | Published June 04, 2010
With stories of workplace suicide regularly gaining attention in the media in the last few years, such as Orange owner, France Telecom in 2008-9, and Apple iPhone manufacturer Foxconn in China, does insurance offer compensation to surviving families and beneficiaries of suicides?
Foxconn, which manufactures electronic and computer parts, has seen a rash of suicides in 2010, with 10 suicides between January and the beginning of June. While this was at first picked up with surprise and sensation in many news outlets, with speculation about the causes running from poor treatment of workers and low pay, to social issues, it is important to have a little perspective.
The company employs hundreds of thousands of employees, including the almost 420,000 at the plant in Shenzhen where the suicides are occurring, which is the size of a fairly sized city in most parts of the world. Most of these employees are migrant workers, coming into cities from rural China to find a job. China’s rate of suicide, according to the most recent figures (1999) from the World Health Organization (WHO), are 13 men out of every 100,000 and 14.8 suicides per 100,000 people for women every year. Given the number of people working at the factory, you could expect anywhere between 30 and 56 people committing suicide at Foxconn every year. Considering the fact that the year is almost halfway through and there have only been 10 suicides, Foxconn is well below the national average.
However, the fact that there has been a recent spate of suicides at one of the world’s top manufacturing centers does pose an interesting question; namely, what is the perspective of insurance, and insurance companies, on Suicide?
In most jurisdictions in the world, accidental injuries or deaths on the job are often covered by business insurance, either in the form of Employer Liability insurance or Worker’s Compensation, whereby the insurer will pay for the employee’s medical treatment and part of lost wages depending on the policy. However, in cases like the Foxconn suicides, insurance such as employer liability or worker’s compensation will not cover expenses of the employee should they survive the attempt, or the surviving family should the attempt succeed due to the non-accidental and self-inflicted nature of suicide. In some jurisdictions, a suicide can be compensable if it is shown to be causally linked to an accidental workplace injury, although in cases such as these, employer liability or worker’s compensation insurance is seen to act as a life insurance policy.
In some instances, Life insurance may pay out in the case of suicide, although this depends on the jurisdiction, type of life insurance policy, and policy exclusions and particulars. In some jurisdictions, individual private life insurance will have a provision stating that if the insured commits suicide within two years of the commencement of the life insurance policy then the insurer will not pay out the benefits, but may return premiums paid depending on the specific policy. If the insured commits suicide after the stipulated two year period has passed, the insurer will often pay out the death benefits, but one should always check the exclusions and provisions of the insurance policy as this may vary. In some cases, group life insurance policies which are used as a recruitment incentive by employers may not have the 2 year provision, in which case death benefits may be paid in the case of a suicide, but again this is dependent on the specific policy the insured is covered under.
If a suicide attempt is unsuccessful, health insurance may pay for treatment depending on the jurisdiction, type of policy and exclusions pertaining to self-inflicted injuries. Group policies will tend to pay for treatment, both physical and psychological, of self-inflicted injuries as they usually do not take previous medical history into account. For example, in the United States it is illegal to discriminate against someone based on health factors under a group policy, and as self-inflicted injuries or those resulting from a suicide attempt are considered to be resulting from a medical condition, usually psychological in nature such as depression, they must be covered by the group policy. Private medical insurance for individuals may exclude self-inflicted injuries and those resulting from a suicide, as individual health insurance plans often exclude pre-existing medical conditions, leaving the individual who attempted suicide to pay for it themselves. If the individual had a history of mental illness, then individual health insurance plans will often exclude that illness and resulting treatments and health problems from coverage.
It is important to remember that the monetary death benefits from a life insurance policy will never replace a lost loved one, and if psychological treatments are covered by your health insurance policy it is always best to seek help.