Categorized | Opinion

Accidental Death

By David Peel

The term “accidental death” seems clear enough to most people. However, in insurance policies the term “accidental death” has a very defined meaning.

Many life insurance policies and credit life policies have an accidental death clause in the contract. This is sometimes called “double indemnity.” In a death caused by accident, benefits can often be doubled.

Oddly enough, the term accidental death is narrowly defined so as not to include medical malpractice. This is true even though medical malpractice admittedly kills more than 198,000 people each year in United States alone.

There is a little known, but sad history relating to another requirement in life insurance.  It deals with the suicide exception. Usually suicide is covered but only after the first two years. This creates an incentive for someone who is contemplating suicide to make their death look like an accident. During the 80s, many family farms were going into foreclosure. Facing the potential dishonor of losing the family farm, more than one farmer threw himself into a combine. The goal was to make it look like an accident after purchasing enough insurance to save the farm.

The chorus from the hit song by John Cougar Mellencamp “rain on the scarecrow blood on the plow”, in my opinion always discussed this issue but I’ve been unable to independently verify that. I do know that during that period of time farming became listed as one of the most dangerous professions.

Most credit life insurance sold now is accidental death insurance. That means that your loan would be paid off in full if your survivors can prove that your death was the result of an unforeseen accident. But again, medical malpractice and many other causes are specifically excluded.

We also see the accidental death issue in car accidents. In a case where a person loses control and strikes a tree at high-speed, would be considered accidental death. However, in the event that it can be proven that the person was even contemplating suicide, the insurance company will usually deny that claim.

It is also important to remember that life insurance is paid out to the beneficiary on the policy. There are two types of beneficiaries: primary and secondary. Primary is the first person listed or group listed that should equal 100%.

In the event that the primary beneficiary predeceases the insured, then the secondary beneficiary (sometimes called the contingent beneficiary) is paid. If there is no beneficiary left then the proceeds from the life insurance policy are paid into the estate of the deceased.

Insurance companies sometimes deny valid claims and have to be sued to make them do the right thing.  Life insurance, after all, is not for the deceased, but for the survivors.

Peel seeks justice for those injured in car accidents, work place incidents, medical malpractice, and nursing homes. He often addresses churches, clubs and groups without charge. Peel may be reached through PeelLawFirm.com wherein other articles may be accessed.

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