I was watching Murder She Wrote this afternoon (give me a break, it’s better than most daytime T.V.) and in the story an insurance claims investigator is attempting to prove a man innocent of murder so that he does not get the death penalty, thereby causing the insurance company to payout on his life insurance.
It immediately occured to me that this story was a little far fetched, surely no insurance company would be forced to payout life insurance after a client recieves the death penalty. So, I thought I would ask the Teeming Millions to confirm my inital reaction. Do life insurance policies contain clauses specifically ruling out payments after recieving the death penalty or are the policies worded in such a way to rule it out?
You standard life insurance policy is incontestable except for non-payment of preminums after 2 years.
So assuming that Scott Peterson has a personal life insurance policy, and assuming that he premiums are kept up, it will pay when he dies. It does not matter if that death is from old age, or with the State of California’s help.
Needless to say sucide =! death penalty. Also when was the last time anyone in this country was arrested, convicted and put to death in less than 24 months? Even if the policy were issued the day before the murder, it will be long past any contestable clause or sucide clause by the time the sentence is carried out.
I can see where a company would refuse to issue a policy on a person who is either on death row, or facing a trial that might lead to the death penalty. But if the policy is in force, it will pay. (Assuming premiums are kept up)
Alright, I just checked with the other people in my office (I work for an insurance co). There’s a clause that stipulates that payout doesn’t happen with the person who is dead has done something illegal (i.e. was shot robbing a bank etc).
Sorry StPauler but Rick is correct. After the contestability period expires (usually two years) the policy is set in stone it can only be canceled for nonpayment of premium
The only adjustment to a death benefit would be due to misstatement of age but even in that circumstance the company will still pay out the benefit less the correct premium base on age.
We’re not talking about cancellation here, we’re talking about application of the payout contingent on death. Since the death was brought about due to the insured’s illegal activity, the insurance company does not have to pay out. Your link hasn’t mentioned that at all.
“Are there exclusions in my policy?*
Yes. No critical illness benefit will be paid if the claim results from the misuse of alcohol or drugs; suicide prior to the second policy anniversary; participation in an illegal activity; injury received during participation in a riot; strike; civil commotion or war; or mental disorders other than Alzheimer’s disease.”
Your example refers to the 2 years contestability. I have provided you with 3 cites One from a insurance companie one legal brief and one is the exact policy langue. There is no qualification made to cause of death after the contestability period in the past companies issued policies with general war restrictions. It is now only common on accidental death policies or stated benefit policies
Your first cite, to maricopa, elucidates MY point. Go to page 8 of the pdf where it says where it WON’T pay benefits for loss:
“injury which occurs when you commit or attempt to commit a crime”
On your second cite, I found the statement about limitations and exclusions which include:
“Commission of a criminal offence;”
Your third cite appears to be the same as the second.
Thanks for proving my case further. I have no idea what you are talking about at this point. The OP is asking whether insurance companies have to pay out if the insured has been killed by the death penalty.
To sum it all up. NO, an insurance company does not have to pay out a loss due to death penalty because the insured commited an illegal crime to get there.
In both cites the portions I wanted to illustrate are regarding life insurance not the critical care or accidental death portions. If you can give me a cite showing a Life insurance policy will not pay for someone on death row. I will be happy to be schooled. My third cite of the actual policy language is corrected here.
You can’t be more wrong but keep trying.
Quote from the first cite
“Incontestability
Your insurance has a contestable period starting with the effective date of your insurance and continuing
for 2 years while you are living. During that 2 years, ReliaStar Life can contest the validity of your
insurance because of inaccurate or false information received relating to your or your dependents’
insurability. Only statements that are in writing and signed by you can be used to contest the insurance.”
2 years of contestability
Quote from the second cite
“Are there any limitations or exclusions to the CAA Term Life Plan?
No benefit is payable under the CAA Term Life Insurance Plan in the case of suicide, while sane or insane, within two years of the effective date of the coverage. We will instead return all premiums paid, without interest. It is important that you read your Certificate of Insurance when you get it to understand exactly what you are covered for.”
2 years of contestability
Quote from third cite
Section 224(c) of the Illinois Insurance Code provides, in relevant part:
“A provision that the policy, together with the application therefor, a copy of which shall be endorsed upon or attached to the policy and made a part thereof, shall constitute the entire contract between the parties and that after it has been in force during the lifetime of the insured a specified time, not later than 2 years from its date, it shall be incontestable except for nonpayment of premiums ***; provided that the application therefor need not be attached to or made a part of any policy containing a clause making the policy incontestable from the date of issue.” (Emphasis added.) 215 ILCS 5/224(c) (West 1998). 2 years of contestability
Do we see a pattern here?
OK, to the OP and to the other dopers, if you want the facts from a doper one works in the insurance industry and spoke with an underwriter and a claim handler to have the information verified, listen to me.
The clause in the life insurance policies that have been documented over and over in this thread show that if a person dies because of illegal activity, the insurance company doesn’t pay out.
I’m not sure why Mr Peabody is ignoring the facts and going down the irrelevant road of 2 year contestability. It’s not germane.
I have owned an insurance agency 24 years, actually paid out death claims where illegal activity occurred (DUI wreck killed himself and two others).
I have been certified in federal court as an expert witness regarding insurance.
My opinions encompass one states insurance law but I am not too old to learn. Please feel free to put up some cites or show me a change in the definition of incontestable.
Done and done. Maybe you can cite some cases where an insurance company has paid out on life insurance on a person executed by the state. Otherwise I stand by my assertations.
LIFE INSURANCE: Proceeds payable to victim’s family, not deceased murderer’s relatives. A husband obtained life insurance on his wife under his employer’s group policy. The policy provided that death benefits on the wife would be paid to the husband or to his relatives if he were deceased. The husband killed his wife and then committed suicide. The husband’s siblings claimed the proceeds of the policy. In Diep v. Rivas, 727 A.2d 448 (Md. Ct. Spec. App. 1999), the court held that the slayer’s rule prevented the siblings from taking. Thus, the wife’s family members were entitled to the proceeds.