Say that someone has life insurance that covers death even due to homicide (called “accidental” death in the sense of non-disease causes). They’ve had the policy for several years so that’s not an issue. But then one day the insurance company receives a request to dramatically expand the amount to be paid out in the event of death, along with a check for the the first month’s increased premium. Three days later the insured is murdered. There’s zero proof that the beneficiary committed or arranged the crime.
Now obviously the insurance company is going to conduct an investigation. But can they either deny the claim altogether on pure suspicion, or drag out the investigation for years to stall on paying? At what point could the beneficiary demand payment?
The insured cannot unilaterally change the contract terms by paying more. Unless (highly unlikely) the original policy gave him that option. If the contract did allow a person to purchase more coverage by paying more premium, then the insurer would have to pay the full amount. They might be suspicious, but denial of a claim must be justified by policy language, and not be based on “mere suspicion.” They have the right to investigate, but if there is indeed “zero proof that the beneficiary committed or arranged the crime,” then the benefits have to be paid. How long the “investigation” can delay payment is a very fact specific inquiry but must be “reasonable” under the circumstances.
The failure in the hypothetical is in the “mail it in 3 days before” but. But if the insured did go through the proper process to increase their insurance amount and in fact had received proof of coverage at the new level, and shortly after that met with an untimely death, the company would be obligated to pay out.
Now how much they might try to dawdle is 100% down to corporate behavior and scruples as modified by local regulation and court precedent. About which we can say nothing useful. And we’d have no way to know or predict how much they’d have dawdled had the increase never occurred in the first place.
In principle I agree, but I would like to note that the standard of proof in civil litigation is very different from that in a criminal trial. In the latter, the standard is that guilt must be proved “beyond a reasonable doubt”. In civil litigation, it would be the “preponderance of evidence”, which has been met if the court considers that it is more likely that the deceased was murdered than that he or she was not. That’s a much lower threshold. So it is perfectly possible that the insurance company successfully defends itself against a payment claim without anyone ever being convicted of the murder.