Insurers can help reduce suicide rate

PUBLISHED : Sunday, 14 May, 2006, 12:00am
UPDATED : Sunday, 14 May, 2006, 12:00am

A measure of Hong Kong's recovery from an economic downturn compounded by the Sars outbreak has been the sustained rebound in the stock market and property markets. A less noticed, but more important, measure of improving sentiment was one we do not talk about much - the suicide rate.

The number of people who took their lives in 2004 - the first year after Sars and the latest for which full figures are available - fell 18 per cent from the previous year, to 1,053, the first decline since 1996 and the biggest in 20 years. The suicide rate is on course to fall below the world average of 15 per 100,000 people.

It is not all due to a return to the good times. Suicide prevention initiatives have played a big part, such as a campaign to raise awareness of the role of charcoal-burning in suicide.

But we have a long way to go to bring our suicide rate down to those of developed countries with which we like to compare ourselves. It is still 50 per cent higher than in the United States, Britain and Singapore, for example.

There is another aspect of this tragic human and economic waste that contrasts starkly with overseas experience, and that is the role of life insurance. Suicide cases for which there were insurance payouts rose from 7 per cent of all payouts in 1997 to 12 per cent in 2003, compared with 2 per cent in the US. Experts believe this is partly explained by the fact that suicide is ruled out as grounds for a claim for the first two years of a policy issued in the US, and in many other countries, compared with only one year in Hong Kong.

As we report today, the Jockey Club Centre for Suicide Research and Prevention has looked into the link between life insurance and suicide. The results show there is room for action to bring down our suicide rate further. The centre found that one in 20 of all people who commit suicide kills themselves weeks or months after the expiry of the one-year exclusion period that would prevent their families getting a death payout. One in five suicides is covered by life insurance. Nearly a quarter of these occur within 24 months of the policy being taken out. One in seven occurs within one month of the threshold after which beneficiaries are eligible for a payout. Sixty suicides a year lead to insurance claims, ranging from $100,000 to $3 million.

As a result of these findings, the centre has asked the life insurance industry to at least extend the policy exclusion to two years and to consider halting payouts for suicide altogether. The reasoning of suicide prevention researchers is sound enough. Most people who eventually take their own lives are not planning to do so when they take out their policies, but when they contemplate suicide their insurance cover is bound to come into their minds. If the suicide exclusion period in life policies was at least doubled, that might encourage many to find another way of resolving their problems and give more time for suicide prevention workers to intervene.

The insurance industry is apparently receptive to these ideas, but its response is tempered with the prudence for which it is known. Cost is not the only issue. Industry executives are understandably concerned not to be seen to be trying to save money by discriminating against families devastated by the senseless tragedy of suicide. The annual payout of $160 million on claims resulting from suicide is only about 1 per cent of industry income from life insurance premiums.

An insurance industry spokesman says it will support any initiative that would help reduce suicide rates. Most people who kill themselves after taking out insurance are in the prime of their working and family lives. The scale of human suffering alone is reason to act.

There is an argument that life insurance should exclude suicide altogether. At the least, any payouts in case of suicide should be so restrictive as to discourage people from taking their lives.