Will a life insurance company pay for death due to renal and liver failure due to alcohol usage?
Total Comments: 10
Posted: Wed Sep 28, 2011 07:31 am Post Subject:
As far as I think, it really depends on the respective insurance company that issued the policy.
If the policyholder informed it’s insurer about his lifestyle honestly while buying the policy, and he dies due to over consumption of alcohol, then I think the insurer should pay out the benefits.
Posted: Wed Sep 28, 2011 12:55 pm Post Subject:
it really depends on the respective insurance company that issued the policy
NO! It does not depend on the "company", it depends on the "contract". The death claim is payable as long as the policy is INCONTESTABLE (has been in force more than two years -- 1 year in a few states). The period of contestability is defined in state law and stated in the contract.
If the policy is still in the CONTESTABLE period, any misrepresentations in the application that are directly connected to the cause of death would allow the insurance company to void the policy and return the premiums. No claim would be paid in that event.
Posted: Sun Oct 16, 2011 04:11 am Post Subject:
Exactly
I completely agree with Max. It depends upon the contract of your insurance policy.
As per my knowledge, most of them do not cover death due to alcohol or drug use.
Posted: Mon Oct 17, 2011 12:26 am Post Subject:
most of them do not cover death due to alcohol or drug use.
This is inaccurate. With almost all "honest-to-goodness" life insurance (as opposed to Accidental Death policies), dead is dead, and the cause, including suicide, is immaterial once the policy becomes incontestable. In individual life insurance policies, it is rare to see exclusions for things other than military service (or war/terrorism) and aviation-related death (but not excluded when one is on board a commercial aircraft as a fare-paying passenger).
Group life insurance may be somewhat more restrictive as to cause of death. For example, group life insurance for police officers or firefighters often restricts the death payment to on-the-job or job-related causes, in such a way that death from a heart attack at home on the weekend, or due to cancer, might not provide a benefit.
Posted: Mon Nov 28, 2011 03:43 am Post Subject:
The policy will pay upon death even if death is due to drug or alcohol use as long as the insured did not lie on the application at the time of application. The policy can still be in it's incontestible period and it still will pay as long as there is no evidence of deceit or fraud.
For example: If a health person applies for a life insurance policy today and then one year passes and several life events happen causing him to go into a deep depression and ends up abusing alcohol and drugs and dies. The policy will pay. When the company does the paramed exam at the time of application, the company would have not found any evidence of liver damage in the enzimes of the blood work and no evidence of drug use. With no evidence of fraud or deceit the policy would pay a death benefit.
Posted: Thu Dec 01, 2011 07:58 pm Post Subject:
The policy will pay upon death even if death is due to drug or alcohol use as long as the insured did not lie on the application at the time of application.
After 2 years, the policy will still pay regardless of a lie on the application.
Posted: Thu Dec 01, 2011 08:23 pm Post Subject:
favmaur,
I don't think that is true. In the case of fraud, i think the insurance company can still void the contract.
I think we need INSURANCE INVESTIGATOR to chime in on this.
I may be wrong and willing to admit it unlike some people MAX.
Posted: Thu Dec 01, 2011 10:45 pm Post Subject:
I don't think that is true. In the case of fraud, i think the insurance company can still void the contract.
No. In life insurance, the incontestable period is IT. Once the policy has been in force past the incontestability period, the only way the company can get off the risk is for non-payment of premium. That's it, period, end of story. Certain riders and other provisions aren't subject to the 2-year (or one in some states) incontestability rule, such as accidental death, misstatement of age or gender, etc.
On the other hand, medical expense policies generally state that "fraud is forever" in terms of incontestability.
InsTeacher 8)
Posted: Fri Dec 02, 2011 07:46 am Post Subject:
Ok, I stand corrected. I was wrong. Thank you Ins Teacher! Can anyone else learn from this?
Posted: Fri Dec 02, 2011 05:22 pm Post Subject:
In the case of fraud, i think the insurance company can still void the contract.
In California, FRAUD is no escape from a claim after a LIFE insurance policy has become incontestable (2 years).
the only way the company can get off the risk is for non-payment of premium. That's it, period, end of story.
However, under CA law (and most other states), the Insurance Code allows IMPERSONATION or NO INSURABLE INTEREST (at the time of application) as reasons to VOID the life (or other) insurance contract back to the moment before it existed, and the Probate Code says a beneficiary's CRIMINAL INVOLVEMENT (in the death of the insured) are reasons the insurance company may lawfully not pay a death claim, regardless of the policy's incontestability.
In the case of criminal involvement, however, the policy will NOT be voided, and the death benefit will be payable to the contingent beneficiary, if there is one, or will pass to the DECEDENT'S estate for distribution according to the Probate Code if the criminally-involved beneficiary was also the policyowner. Otherwise the death benefit will pass to the policyowner or their estate -- or to whomever else the contract permits, if stated differently.
Beginning in 2010, CA law changed and now makes HEALTH INSURANCE policies incontestable after the policy has been in force 24 consecutive months. However, the law still allows health insurance policies to be voided for FRAUD in the application, but NOT for material misrepresentation or any of the other reasons that a policy may be voided during the contestable period.
Posted: Wed Sep 28, 2011 07:31 am Post Subject:
As far as I think, it really depends on the respective insurance company that issued the policy.
If the policyholder informed it’s insurer about his lifestyle honestly while buying the policy, and he dies due to over consumption of alcohol, then I think the insurer should pay out the benefits.
Posted: Wed Sep 28, 2011 12:55 pm Post Subject:
it really depends on the respective insurance company that issued the policy
NO! It does not depend on the "company", it depends on the "contract". The death claim is payable as long as the policy is INCONTESTABLE (has been in force more than two years -- 1 year in a few states). The period of contestability is defined in state law and stated in the contract.
If the policy is still in the CONTESTABLE period, any misrepresentations in the application that are directly connected to the cause of death would allow the insurance company to void the policy and return the premiums. No claim would be paid in that event.
Posted: Sun Oct 16, 2011 04:11 am Post Subject:
Exactly
I completely agree with Max. It depends upon the contract of your insurance policy.
As per my knowledge, most of them do not cover death due to alcohol or drug use.
Posted: Mon Oct 17, 2011 12:26 am Post Subject:
most of them do not cover death due to alcohol or drug use.
This is inaccurate. With almost all "honest-to-goodness" life insurance (as opposed to Accidental Death policies), dead is dead, and the cause, including suicide, is immaterial once the policy becomes incontestable. In individual life insurance policies, it is rare to see exclusions for things other than military service (or war/terrorism) and aviation-related death (but not excluded when one is on board a commercial aircraft as a fare-paying passenger).
Group life insurance may be somewhat more restrictive as to cause of death. For example, group life insurance for police officers or firefighters often restricts the death payment to on-the-job or job-related causes, in such a way that death from a heart attack at home on the weekend, or due to cancer, might not provide a benefit.
Posted: Mon Nov 28, 2011 03:43 am Post Subject:
The policy will pay upon death even if death is due to drug or alcohol use as long as the insured did not lie on the application at the time of application. The policy can still be in it's incontestible period and it still will pay as long as there is no evidence of deceit or fraud.
For example: If a health person applies for a life insurance policy today and then one year passes and several life events happen causing him to go into a deep depression and ends up abusing alcohol and drugs and dies. The policy will pay. When the company does the paramed exam at the time of application, the company would have not found any evidence of liver damage in the enzimes of the blood work and no evidence of drug use. With no evidence of fraud or deceit the policy would pay a death benefit.
Posted: Thu Dec 01, 2011 07:58 pm Post Subject:
The policy will pay upon death even if death is due to drug or alcohol use as long as the insured did not lie on the application at the time of application.
After 2 years, the policy will still pay regardless of a lie on the application.
Posted: Thu Dec 01, 2011 08:23 pm Post Subject:
favmaur,
I don't think that is true. In the case of fraud, i think the insurance company can still void the contract.
I think we need INSURANCE INVESTIGATOR to chime in on this.
I may be wrong and willing to admit it unlike some people MAX.
Posted: Thu Dec 01, 2011 10:45 pm Post Subject:
I don't think that is true. In the case of fraud, i think the insurance company can still void the contract.
No. In life insurance, the incontestable period is IT. Once the policy has been in force past the incontestability period, the only way the company can get off the risk is for non-payment of premium. That's it, period, end of story. Certain riders and other provisions aren't subject to the 2-year (or one in some states) incontestability rule, such as accidental death, misstatement of age or gender, etc.
On the other hand, medical expense policies generally state that "fraud is forever" in terms of incontestability.
InsTeacher 8)
Posted: Fri Dec 02, 2011 07:46 am Post Subject:
Ok, I stand corrected. I was wrong. Thank you Ins Teacher! Can anyone else learn from this?
Posted: Fri Dec 02, 2011 05:22 pm Post Subject:
In the case of fraud, i think the insurance company can still void the contract.
In California, FRAUD is no escape from a claim after a LIFE insurance policy has become incontestable (2 years).
the only way the company can get off the risk is for non-payment of premium. That's it, period, end of story.
However, under CA law (and most other states), the Insurance Code allows IMPERSONATION or NO INSURABLE INTEREST (at the time of application) as reasons to VOID the life (or other) insurance contract back to the moment before it existed, and the Probate Code says a beneficiary's CRIMINAL INVOLVEMENT (in the death of the insured) are reasons the insurance company may lawfully not pay a death claim, regardless of the policy's incontestability.
In the case of criminal involvement, however, the policy will NOT be voided, and the death benefit will be payable to the contingent beneficiary, if there is one, or will pass to the DECEDENT'S estate for distribution according to the Probate Code if the criminally-involved beneficiary was also the policyowner. Otherwise the death benefit will pass to the policyowner or their estate -- or to whomever else the contract permits, if stated differently.
Beginning in 2010, CA law changed and now makes HEALTH INSURANCE policies incontestable after the policy has been in force 24 consecutive months. However, the law still allows health insurance policies to be voided for FRAUD in the application, but NOT for material misrepresentation or any of the other reasons that a policy may be voided during the contestable period.
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