A client is SCUBA diving and tragically dies.  He has a $1 million dollar accidental death policy.  His wife is the beneficiary of the accidental death policy.  She completes the claim form with the insurance company and they happily pay the $1 million policy.  Nope.  Of course, they don’t pay.  They denied the claim and refuse to pay her anything.

The Probate Pro is then retained to collect and to force the insurance company to pay the full policy value.  The insurance company claims that the client died from heart attack which is a natural cause of death rather than dying from drowning, which would constitute an accident.  Who wins?

First, let’s examine the difference between an accidental death policy and a life insurance policy. Accidental death insurance is a policy that pays benefits to the beneficiary if the cause of death is due to an accident. A life insurance policy pays benefits to the beneficiary for almost all deaths (natural causes and accidents). An accidental death policy is generally less expensive than a life insurance policy. Death by illness, suicide, a war injury, and natural causes are generally not covered. Similarly, death while under the influence of any non-prescribed drug or alcohol is generally not covered.

The difficulty with an accidental death policy is that it is often difficult to discern whether the death was caused by an accident or natural causes. Imagine this situation (also a case of The Probate Pro).  A man strikes a tree while driving and dies. Does the accidental death policy pay out?  To answer the question the following issue must be resolved. The issue is whether the person died from a heart attack (natural cause) and then struck a tree (no coverage) or hit a tree (accident) and then suffered a heart attack (coverage exists)?

The distinction is critical in evaluating whether coverage exists or not and whether the insurance company must pay. However, the distinction can lead to litigation because most insurance companies are not readily going to pay out on a policy when the distinction is close. Usually, a cursory review of the manner of death entry on the death certificate provides sufficient ammunition for the insurance company to find a way to deny payment on the policy.

ACCIDENTAL DEATH POLICYSo did the SCUBA diver die from a drowning (accident) or a heart attack (natural causes)? Each side dug in and litigation ensued. In preparation for trial, The Probate Pro retained an expert to provide an opinion on the manner and cause of death. The expert concluded that the man drowned and it was an accident.  The case proceeded to trial and The Probate Pro successfully resolved the matter in favor of the spouse.

And, did the man die from striking the tree with his car or suffer a heart attack and then run into the tree?  Similarly, as with the SCUBA diver, the insurance company refused to pay and litigation ensued.  Again, The Probate Pro retained an expert to provide an opinion on the manner and cause of death.  The expert concluded that the man hit a tree (accident) and died. Once again, The Probate Pro successfully resolved the case.

If you have been denied payment of an insurance policy, do not just accept that decision.  Contact The Probate Pro for a free consultation to review the matter.