Life Insurance Benefits after a Homicide

When you buy a life insurance policy, you are entering into a contract with the insurance company to provide benefits to your survivors in the event of your death. People buy insurance because of the inherent uncertainty of life. They want to leave something behind so their loved ones wont have to worry about expenses after theyve passed on.

Life Insurance Claims Not Covered

Generally, the insurance company will pay on death claims but there are circumstances under which they will not. These circumstances will be spelled out in the contract, so you have to read it thoroughly to see whats covered and what is not. (1) The first two years of most insurance policies are what is known as the contestable period. During that time, insurance companies can refuse to pay a claim for suspicious deaths. Suicides will not be covered during the first two years, but will be thereafter. They may hold benefit payments for homicides that occur in the contestable period as well. What usually happens, though, is that the insurance company follows up with the police to determine who is guilty of the homicide. If the beneficiary committed the crime, they will not pay. If the beneficiary is not charged or is acquitted, the policy is paid.

Slayer Laws and Other Exclusions

In the United States, there is a common law rule that states that no one may benefit financially from committing a murder and then taking a piece of the victims estate. (2) It is under this rule, the Slayers Rule, that the insurance companies withhold benefit payments pending the outcome of the investigation. They want to be sure that the beneficiary is not also the killer. In addition of Slayer Laws, there may be state statutes that deny claims for homicides under certain circumstances, and there are also crimes that will bar the payment of claims.

An Extreme Example

Sometimes, insurance doesnt work like you expect it to. In 2009, an Illinois mother was denied benefits on a policy after her daughter was murdered. (3) The daughter applied for a life insurance policy with AFLAC and named her mother as the beneficiary. Shortly afterward, she was murdered by blunt force trauma and strangulation. The Chicago police cleared the mother of the crime and told AFLAC as much but wouldnt put it in writing because the case was still under investigation. AFLAC denied the claim stating insufficient proof of loss and stated that they require the name of the person charged with the crime, even though no one had been charged at that time.

The Contestability Period Matters

After the contestable period, most life insurance will pay benefits for a homicide. The benefits are there to help the survivors; after all, its why we buy life insurance. However, if the beneficiary is charged with the crime, the payment will be denied. Also, if the policy specifically states that it will not pay in the event of a homicide, benefits will not be paid. It is important that you understand the contract of a life insurance policy before you sign it so you get the coverage you are expecting. If it isnt excluded in the contract, its covered.

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