Life Insurance And Suicide Exclusion

An often seen reason for denying a claim for life insurance benefits is the accusation by the insurance company that the insured committed suicide.

As is pointed out in the 1982, 14th District Court of Appeals opinion, Parchman v. United Liberty Life Ins. Co., life insurance policies typically exclude suicide as an assumed risk.  However, this exclusion is virtually always limited to a suicide that takes place within two years of the inception date of the policy.

In the Parchman case, the policy excluded suicide as an assumed risk for two years from the policy date and provided a reduced benefit of the return of all premiums paid if death resulted from suicide within that period.

Another example comes from the 1986 opinion styled, Southern Farm Bureau Life Ins. Co. v. Dettle.  This opinion is from the Amarillo Court of Appeals.  In this case another policy provided: If the insured within two years from the date of issue of this policy shall die by his own hand or act whether sane or insane, the liability of the Company shall be limited to an amount equal to the premiums actually paid, without interest.

Something else for life insurance lawyers to keep in mind is that the Southern Farm Bureau opinion discussed that when the suicide exclusion is litigated, the court’s definition of “suicide” should include an “intentional” component.  The rationale for this was discussed in the case wherein the Court commented that if the court charged in the policy language (If the Insured … shall die by his own hand or act whether sane or insane”) and if the policy language were interpreted literally, the insurer could avoid liability even in instances of pure accidents; for example, a pure accidental death at one’s own hand would be excluded by a literal interpretation of the policy language.

Persons attempting to recover benefits who have those benefits denied by the insurer should talk to an experienced life insurance attorney.  It would surprise people to know that this issue can be litigated and won.