Life insurance is one of the main financial tools Americans use to ensure the wellbeing of their families once they pass away. As such, policy proceeds rise to hundreds of thousands and even millions of dollars. It is not uncommon for this to be an incentive and lead people to murder the insured to get access to the money faster. It can be a plot made by a loved one, the beneficiaries, or even the insureds themselves can hire someone to murder them.
One of the main concerns is: Does life insurance cover homicide? Can someone claim the benefit if the death was deemed a murder?
In this article our life insurance attorneys answer these questions and explain what policy beneficiaries can do when dealing with a denied life insurance claim due to murder. If you need immediate legal help, do not hesitate to contact us. Call (888) 510-2212 for a free consultation with one of our lawyers.
Does Life Insurance Pay If the Insured Is Murdered?
Normally, life insurance covers murder, regardless of whether it is deemed a homicide or manslaughter if it has been at least two years since the policy effective date. There are only a few exceptions when life insurance does not cover murders, and usually the beneficiary can claim and receive the policy benefit if they were not involved in the murder plot. Otherwise, if the police investigation proves they participated in the act, they have no right to the death benefit due to the slayer rule, also known as the slayer statute.
The slayer rule prevents a life insurance payout to anyone who murdered or is closely tied to the murder of the insured. In this case, the insurance company pays the benefit to the insured’s contingent beneficiaries or estate.
If the policyholder is murdered during the first two years of the policy, also known as the contestability period life insurance companies have certain rights – they are entitled to launch their own investigation into the murder. They will review the application documents to rule out any material misrepresentation and request medical records, toxicology reports, and autopsy reports to determine the exact cause of death. Until they finish the investigation or the police find the beneficiary not guilty, they will delay the claim.
Accidental Death Life Insurance and Murder Cases
Accidental death is the loss of life occurring due to any reason other than natural causes, where natural causes refer to disease or old age. Therefore, even cases of premeditated murder are considered an accidental death. If the policyowner had an accidental death insurance policy, their beneficiaries can collect the benefit.
If you are the beneficiary of an ADD policy and the payout was denied due to murder, read our guide about accidental death and dismemberment insurance coverage and how to handle denied ADD claims.
Life Insurance Payout for Murder-Suicide
Murder-suicide cases are extremely tragic. They involve an act in which a person kills one or more other individuals before, or at the same time as, killing him- or herself. Such cases can take many forms and usually involve family members, relatives, and friends. The surviving family members’ grief associated with several deaths is often compounded by the insurance company’s denial of their life insurance claim.
Life insurance companies do pay for murder-suicide cases. However, the rules surrounding these cases are extremely complex and raise several issues. For example, if the murderer is the primary beneficiary on the life insurance policy and dies after the victim, the murderer’s estate may claim entitlement to the full policy proceeds.
This will create a conflict because the victim’s estate may also file a life insurance claim. In addition, contingent beneficiaries may also file a competing life insurance claim. Such cases are complex and often result in the insurance company filing an interpleader. An interpleader is a civil lawsuit that allows an innocent stakeholder (an insurance company) to initiate a court action to resolve a beneficiary dispute involving several claimants.
When an insurer files an interpleader, it deposits the life insurance proceeds in a court’s escrow account and withdraws from the suit. It is not uncommon for insurance companies to ask a court to pay their legal fees from the insurance proceeds. If the life insurance amount is small, legal fees and costs may deplete the life insurance benefits.
Murder-suicide cases involve interpretation of complex criminal, insurance, and estate laws. For a claimant to recover insurance benefits, several state statutes require them to prove by a preponderance of the evidence that the victim was, in fact, feloniously murdered. What seems like an insurance lawsuit may turn into a murder trial that may be costly, lengthy, and highly emotional for the survivors.
At our law firm, we are skilled at negotiating settlements before an interpleader is filed. We encourage the parties to exchange their legal arguments before the insurer initiates a lawsuit. We also litigate interpleaders that have been filed. This saves time, money and effort of litigation. Read about such a case where we have reached a satisfactory result for our client after dealing with murder-suicide issues and beneficiary disputes.
Reasons Why Life Insurance Companies Deny Claims Based on Murder
Here are the main reasons why life insurance will not pay out claims involving murder:
The Beneficiary Is Guilty of Murdering the Insured
If the beneficiary is a suspect in murdering the policyowner, the insurance company will delay paying the claim until they are cleared of any accusation by the police. However, even if the beneficiary is acquitted, but the insurer believes there is strong evidence that connects them to the murder, they might file a suit against the beneficiary in civil court.
Unlike the criminal court, the civil court requires less evidence to find someone guilty. That means that the beneficiary still has a chance to become liable for the death and be refused the death benefit. In such cases, the beneficiary should consult with an experienced life insurance lawyer to advise on their chances of recovering the policy proceeds and the best course of action.
The Insured Was Murdered While Participating in a Criminal Activity
Another reason why life insurance companies may deny payment is if the policyowner was murdered while engaged in dangerous activity such as driving under the influence. Similarly, they will refuse to pay if the insured was involved in unlawful activities like dealing drugs, trespassing illegally, robbing people, or participating in gang activity.
Murder and Life Insurance Fraud
It is not uncommon for insureds and/or their families to plot their own deaths to get early access to policy proceeds. This is insurance fraud. If the insurer has reason to believe the insured or their beneficiaries acted unfaithfully, they will delay paying the claim until and only if proved otherwise.
The insurance company will launch its own investigation and collaborate with the police to determine whether the murder was intentional. For instance, if the investigation results say that the policyholder and/or their beneficiaries conspired and hired someone to murder them, the insurer will refuse to pay out the proceeds. If the insured survived the murder attempt they had planned, the company will cancel the policy.
What to Do if Your Claim Is Denied Due to Murder
If you are dealing with a claim delayed or denied due to a murder investigation, you should immediately seek legal consultation to learn about your rights as a life insurance beneficiary and the particular circumstances of your case.
At our law firm, our life insurance attorneys have handled claims involving homicide for all the reasons listed above. We can help you throughout the entire process, from submitting a claim for death benefits to filing an appeal, solving an interpleader, or suing the insurance company.
By presenting strong legal support for our clients, we can successfully counteract the tactics employed by life insurance companies or force a competing claimant to either give up their claims or settle for a fraction of what they originally demanded. We fight for our client’s rights to receive what is rightfully theirs under the law.
Our life insurance lawyers will help you navigate through the complex issues of murder cases. We offer competent and professional legal advice that you can trust.
We offer competitive contingent fees. That means that you pay us only if we recover the death benefit for you. Once the case is settled, we will work with you on a fee structure that you feel comfortable with.
Call us at (888) 510-2212 for a free consultation if you have questions about a murder insurance issue.