Don’t treat death as a way to settle debts: life insurance won’t pay out for suicides within two years, workplace injuries won’t be recognized, and debts are still deducted from your estate first.

13. Don’t treat death as a way to settle debts: life insurance won’t pay out for suicides within two years, workplace injuries won’t be recognized, and debts are still deducted from your estate first.

Cost: There is no expense involved; you just need to do the math.

In plain terms: If you commit suicide within two years of buying a life insurance policy, the insurer won’t pay out any benefits — only the cash value of the policy is returned. Workplace injuries also won’t be recognized, so no compensation is paid for a work-related death. Any outstanding debts are deducted from your estate first, leaving only the remainder for your family. They also have to bear the health consequences described in Section 4 of this chapter (relatives of suicide victims face a 7–8 times higher risk of developing a mental disorder within five years).

Benefit: Article 44 of the Insurance Law governs contracts where death is the condition for payout. Within two years of the policy’s start or reinstatement, if the insured person commits suicide, the insurer is not obligated to pay any benefits. However, if the insured was legally incapable of making decisions at the time of suicide, the insurer must return the policy’s cash value — meaning only a partial refund, not the full coverage amount. Typical life insurance payouts run into the hundreds of thousands of yuan, so this benefit is considered substantial. Article 16(3) of the Work Injury Insurance Regulations states that self-harm or suicide does not qualify as a work injury, so none of the three types of compensation for work-related deaths apply: a six-month funeral allowance based on local average monthly wages, survivor’s pensions, and a one-time payment equal to 20 times the national per capita disposable income. Articles 1159 and 1161 of the Civil Code stipulate that estate settlement must first cover all legally required taxes and debts, with heirs only receiving what remains — they’re liable only up to the value of the inherited assets, and can avoid this obligation by renouncing their inheritance.

Evidence grade: A

Sources: Standing Committee of the National People's Congress (2015 revision). Article 44 of the Insurance Law of the People's Republic of China. <https://flk.npc.gov.cn/detail?id=2c909fdd678bf17901678bf7c4060811>; State Council of China (2010 revision). Regulation on Work-Related Injury Insurance (State Council of China Order No. 586 No.) Article 16, Article 39. <https://www.gov.cn/gongbao/content/2011/content_1778064.htm>; National People's Congress (2020). Civil Code of the People's Republic of China Article 1159, Article 1161. <https://flk.npc.gov.cn/detail?id=ff808081729d1efe01729d50b5c500bf>

Notes: This entry focuses solely on financial implications. Other entries in this section and Section 1 aim to prevent such situations from occurring. Article 44 of the Insurance Law applies only to the first two years after purchase; it is included here for completeness, not as a strict timeline. The health risks for family members are detailed in Section 4. For help dealing with suicidal thoughts, see Sections 1.25 and 1.32; information on post-survival complications can be found in Section 1.33. The exact amounts for the three work injury benefits are listed in Section 19.15, while the procedures for accessing housing provident funds and social insurance benefits from an estate are explained in Section 25.9. 〔100000〕