You probably have been reading about the guy being held in Aruba on the suspicion of murder because of the presumed death of his girlfriend several weeks ago. One of the things that came to light early in the investigation is that he was the sole beneficiary on a $1,500,000 Accidental Death and Dismemberment policy. His suspicious behavior included at least 4 calls to the insurance company concerning the policy and a possible claim.
My friends and colleagues have asked me several questions. Here are their questions and my answers based on my 42 years of experience:
1. Is this a covered claim? Depends on the exact wording of the accidental death policy however, most policies require that there is an accident that results in bodily injury of the insured person and that death is a direct result. However, in this case there is no body and therefore no way to determine if there was an “accident”. This presents a problem for the beneficiary because it is their responsibility to submit evidence that shows the death was caused by a covered accident. Without the body and proof that an accident occurred than it is up to a court of competent jurisdiction to determine that a death occurred and under what circumstances. That could take a number of years before she could be presumed dead by a court.
2. Is murder an accident? Yes, it is an accident for the insured person because presumably it was an unexpected, sudden, and abrupt event which is usually the definition of an accident.
3. If it’s found that the boyfriend murdered her can he still collect the proceeds from the policy? No. There is a common law principal that a named beneficiary can not benefit from a policy when they feloniously or intentionally kill the insured person. Many states have codified this principle by specific statue usually referred to as “slayer laws”. Here is a typical law:
A named beneficiary of a bond, life insurance policy, or other contractual arrangement who feloniously and intentionally kills the principal obligee or the person upon whose life the policy is issued is not entitled to any benefit under the bond, policy or other contractual arrangement, and it becomes payable as though the killer had predeceased the decedent.
Even if the beneficiary isn’t criminally charged with the insured’s death they still might be excluded from receiving payment since the insurance questions involve insurance laws rather than criminal laws and would be tried in a civil rather than a criminal court.
4. Can a “friend” be a beneficiary on a policy with a death benefit? Does a boyfriend have an insurable interest in his girlfriend’s life? This issue isn’t as clear. It’s presumed that a spouse has an insurable interest in the life of the other spouse however, with a non-spousal relationship it is less clear if there is an insurable interest. The usual standard is if the beneficiary has a financial loss if the insured person dies. In most cases “insurable interest” is only required at the time of policy purchase however, according to one source requiring a insurable interest at the time of sale is “a long dormant” practice and in the Aruba case the policy has already been issued. After the policy purchase it becomes less clear if an “insurable interest” needs to exist. That point can be argued in court by the estate of the insured person or by their heirs.
5. If the beneficiary can not collect because of a “slayer law” than who will collect? Most “slayer laws” treat the slayer as if they had predeceased the insured person and the next person in the order of secession or the contingent beneficiary would receive payment. In many cases insurance companies will ask the courts to make the determination.
Bottom line is that the boyfriend will probably not be able to collect any benefit from his girlfriend’s accidental death policy because of the “slayer laws” and the concept of “insurable interest”.