One of the most painful events a family can endure is the suicide of a loved one. This tragedy can be compounded when a life insurance company denies paying the death benefit based on a suicide exclusion in the policy.
Typically, these clauses are only in effect for the first two years of the policy. The intent is obviously to prevent people who wish to end their lives from getting a windfall for their families. This makes sense in that it is not good in a society for people to have incentives to commit suicide.
On the other hand, there are many cases where a life insurance claim is denied based on a suicide clause where it is evident that the insured was suffering from a serious depression and had no intent to defraud the insurance company.
Simply because the life insurance company denies payment of a claim does not mean that an aggrieved beneficiary is left without options.
For instance, there may be a dispute about whether or not the insured actually took his or her life. Sometimes people die in situations where it is not conclusive that they committed suicide. If the insurance company cannot show that it is more likely the death was caused by suicide, as opposed to being accidental, it will have to pay the death benefit. Generally, the burden of proof is on the insurer because the law contains a presumption against suicide.
Even if the insured committed suicide, the insurance company will still have to pay if the insured was insane at the time of the act—in other words, if the insured committed suicide due to an irresistable impulse, or did not understand that the act would cause his or her death or appreciate its deadly consequences.
These cases may be further complicated depending on what type of life insurance policy is at stake: for instance, if it is part of a group plan or purchased independently from an agent or broker, different laws may apply.
The Law Offices of Eric Dinnocenzo has handled a number of these cases. You can contact us at (212) 933-1675 for a free consultation.