I met with busy Philadelphia life insurance beneficiary lawyer Chad G. Boonswang, Esq. recently and spoke with him about how life insurance providers handle beneficiaries’ claims when the insured commits suicide.
Veronica Baxter: Do insurance companies pay beneficiaries’ claims when the insured dies by suicide?
Chad Boonswang: Perhaps. It depends on several factors, though I will tell you that life insurance companies frequently try to avoid paying those claims. Beneficiaries are often feeling so bereft at the unexpected death of their loved one that when their claims are denied, they don’t have the heart to pursue it further.
Most should. Keep in mind that the insurance companies only make money when they don’t pay claims. They have little incentive to pay beneficiaries when there is a reason, however tenuous, to deny a claim, unfortunately.
VB: Wait – don’t insurance companies have a duty to the beneficiaries to pay?
CB: No. Again, insurance companies have no incentive to pay when there is any possible opportunity to deny a claim. In the case of suicide, these claims are frequently denied when they should not be.
VB: How can a beneficiary know if their claim should not have been denied?
CB: Well, there are a number of things we as life insurance beneficiary lawyers can successfully argue, but to put it simply, we look at two things: how long the insured had the policy, and the specific terms of the policy itself. The facts surrounding the death of the insured are also important.
VB: Why does it matter how long the insured had the policy?
CB: Life insurance policies are subject to a two-year contest ability period during which the insurer can contest a death, meaning, if the insured dies by suicide within those first two years the company can claim that they took out the policy in contemplation of committing suicide, and deny the claim.
VB: Does this mean a beneficiary has no chance if the insured died within the first two years of the policy?
CB: Absolutely not! It means that once a claim has been denied due to suicide within the contest ability period, we have to argue that the death of the insured was an accident or something else, something other than suicide.
VB: What are the other policy terms that can trigger denial of a claim?
CB: There are policy terms, or provisions, that are meant to keep people from buying a policy simply to leave money to their family after a suicide. These terms apply regardless of how long the insured had the policy.
To deter people from buying life insurance when they are planning suicide, insurance companies include provisions known as exclusions. Exclusions are reasons that they will not pay a claim for benefits. These are listed in the actual life insurance policy itself.
The applicable exclusion here is called a suicide provision – as an aside, you should always check your life insurance policy for a suicide provision before purchasing one. The suicide provision addresses the terms and conditions of a payout, as well as the exclusion due to suicide specifically.
If the insured’s policy contains an express suicide provision like that, then a beneficiary’s claim may be denied pursuant to its conditions. It’s easy to find – it will clearly state that no death benefit will be paid if the insured commits suicide or if suicide is the cause of death.
VB: So if the insured’s policy has a suicide provision, a beneficiary should not bother filing a claim?
CB: No, no – the beneficiary should absolutely file a claim. What if with an attorney’s help they can show it was not suicide? What if the language of the suicide provision is such that it does not apply to this particular death? There is so often a chance to argue that the facts of the insured’s death do not qualify as suicide, or do not fall within the policy’s exclusion. Our firm has gotten many, many claims paid that were first denied due to suicide.
About the Authors
Veronica Baxter is a writer, blogger, and legal assistant operating out of the greater Philadelphia area.
Chad G. Boonswang, Esq. is a litigation lawyer based in Philadelphia, PA who graduated from the University of Pennsylvania and Villanova University Charles Widger School of Law. Mr. Boonswang founded his practice in 2002 and has recovered tens of millions of dollars on behalf of his clients from life insurance claims and catastrophic injury cases.
Mr. Boonswang has been selected as an ASLA 2014, 2015, 2016, 2017, and 2018 Top 10 Litigation Lawyer and year after year has earned a 10.00 “Superb” rating on Avvo. He also maintains an active blog on current events and issues in life insurance law and policy.