Life Insurance Lawyer Florida
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Suicide and life insurance
How life insurers use purported suicide to deny claims
There may be no more devastating event in life than the loss of a loved one due to suicide. Friends and family members are often left wondering why the death occurred, what they could have done to prevent it, and how they will possibly go on following the tragedy.
Notwithstanding those devastating impacts for survivors, suicide has become an increasingly unfortunate reality for many Americans. Indeed, according to one study, the rate of suicide in the United States jumped nearly 25% between 1999 and 2014. Even still, many experts believe a great number of suicides go unreported or misclassified in autopsy reports.
The interplay between suicide and life insurance has always been a tenuous one. This is especially true as life insurance companies try to deal with an ever-increasing onslaught of claims stemming from suicide. This article explores some of the hot topics surrounding suicide and life insurance. It also provides information for beneficiaries who have had claims denied when suicide is an issue.
The suicide exclusion in life insurance policies
On a purely intellectual level, most of us can understand why life insurance companies would not want to make death benefit payouts to the beneficiaries of policyholders who committed suicide. After all, it is not a far stretch of the imagination to see how an individual – distraught from financial struggles, depression, and other issues – might use a life insurance policy as a financial security blanket for his survivors.
Imagine, for example, a middle-aged husband and father of three who lost his job in the recession. The bills are piling up, the mortgage on the house is near foreclosure, and there doesn’t seem to be a good job opportunity anywhere on the horizon. If you could kill yourself to get your family a multi-million dollar life insurance death benefit that would lift them out of the financial hole, more people might consider that option than we like to admit.
From the life insurer’s point of view, however, this is a worst-case scenario. What profit-generating insurer would allow a policyholder to exert complete control over policy payouts? That is essentially what life insurance companies would be doing if they indiscriminately paid death claims when the cause of death was suicide.
Consequently, life insurance companies have built in a couple of policy exclusions that lessen their risk of paying death benefit payouts anytime suicide might be involved in the insured’s death. The first is what is known as an outright “suicide exclusion.” These provisions prohibit the payment of death benefits when the insured commits suicide at any point during the policy term.
The second is the “contestability period.” These provisions basically say that if the insured dies within the first two years of the policy – including if the cause of death is suicide – then the life insurance company does not have to pay a death benefit at all.
At face value, both of these provisions seem reasonable. Insurance companies want to discourage people from using their services as a macabre form of financial planning. Unfortunately, life insurers have twisted these provisions to work to their advantage – even when the death at issue did not come by suicide.
The suicide excuse from life insurers
As attorneys who specialize in contesting the wrongful denial of life insurance claims, we are never surprised when insurance companies issue claim denials that are “justified” by the insured’s alleged suicide – even in cases where the autopsy report deemed the death a result of an accident or natural causes. Indeed, insurance companies play these tricks all the time.
One illustrative case came out of Atlanta. The life insurance policyholder was a man named Allen. Allen held a $1 million life insurance policy that named his sister, Brenda, as his sole beneficiary. The policy contained an outright suicide exclusion that allowed the insurer to avoid paying a death benefit if Allen committed suicide at any point during the policy term.
Four years after the policy was issued, Allen went windsurfing for the first time in his life. As a novice to the sport, he was unsure exactly how to secure his body to the surfboard for maximum safety. As a result, he simply did not connect himself to the board in any appreciable way.
Two hours into his first windsurfing excursion, Allen experienced an unexpected wind surge. Friends watched in horror from the shore as Allen was swept away from his surfboard and into the swirling whitewater of the river. Much to their dismay, his body was recovered on the shore three days later. The coroner ruled his death an accidental drowning.
When Brenda submitted a claim to Allen’s life insurance company, she was surprised to receive a denial letter in the mail. In fact, the justification for the denial was even more shocking – the insurer proclaimed the incident a self-inflicted death that fell squarely within the policy’s suicide exclusion. Specifically, the insurer claimed that if Allen hadn’t wanted to die, he would have appropriately harnessed himself to the surfboard.
Brenda immediately contacted an attorney specializing in the denial of life insurance claims. He quickly recognized that the insurance company was trying to wrongly invoke the suicide exclusion clause to deny an otherwise valid claim. After a detailed consultation with the attorney, Brenda decided to sue the insurance company for the benefits she believed Allen intended for her.
Ultimately, Brenda prevailed in court. There was simply no evidence on the record that suggested Allen had any suicidal ideation. While he may have made a poor decision in ignoring available safety equipment, that – in and of itself – was not enough to warrant his death a suicide for purposes of the life insurance policy.
Every day in our practice, we see insurance companies playing tricks like these to avoid policy payouts. If you have experienced a claim denial based on a life insurance company’s determination of suicide, call us today. We successfully contest claim denials like these all the time. We’re happy to review your case and help get the benefits you deserve.
- Number one is a misrepresentation on the application. This typically involves failing to disclose a medical condition. However, we can get over this hurdle the majority of the time.
- A lapse of a life insurance policy is probably second most common. What happens is that the insured gets sick and misses a payment or two. These are tough, but often we can get these claims paid.
- Probably third is the type of death exclusion. This could be a suicide or it could be a self-inflicted injury. Murder is another exclusion. Health again can fall under this exclusion. We often win suicide exclusions as we cite case law that the death was actually accidental.
- A very common exclusion is the alcohol exclusion. The insured may have been killed in a car crash, but the autopsy revealed alcohol in the person’s system. We have many legal briefs to combat this exclusion.
- Heroin and opiates or illegal drug exclusion is one of the biggest now. With the opioid crisis, there are tens of thousands of deaths.
- Prescription drug overdose exclusion may involve an overdose of medicine or taken medicines that are contraindicated.
- An ex-spouse being cut off from life insurance benefits is a big one. We actually have a half dozen ways to get over this hurdle.
- Having a spouse not listed as a beneficiary is another reason for denial
- Having a child not listed as a beneficiary is one too.
- Having only a primary beneficiary who is deceased is another.
- On an AD&D (accidental death and dismemberment) life insurance policy, a fall not being considered an accident is extremely common.
- The insured’s age not being correct on the initial application is a reason for denial.
- Having the wrong social security number listed is common.
- An autoerotic asphyxiation exclusion is an easy one for us to beat.
- An omission on the application is a big reason for denying a life insurance claim, but we have legal briefs to this effect.
- Not providing the required documents to the insurance company after death is a reason.
- Information which is argued to not be correct is one.
- When there is a dispute between two or more beneficiaries, an interpleader may occur, and we always get these resolved quickly.
- A beneficiary not named is a reason for not paying it out.
- A life insurance policy may be transferred from one company to another by the employer which causes major problems.