common-law insurance suicide
What statutes constrain an insurance provider&#39;s treatment of suicide?
<p>Many insurance companies have explicit suicide clauses: exclusions that allow the company to <em>deny</em> benefits to the policy holder's estate.  Essentially, suicide voids the benefits policy.</p>

<p>What statutes (if any) govern an insurance company's actions in this arena?  That is, do any statutes prohibit a company from denying benefits?</p>

<p><sub><strong><em>Note</strong>:
If you've been contemplating things, the people at the
<a href="http://www.suicidepreventionlifeline.org/" rel="nofollow noreferrer">National Suicide Prevention Lifeline</a> are great.  They speak Spanish and English, and their number is 1-800-273-8255.</em></sub></p>

<p>As no jurisdiction was given, the law in Australia is the <em>Life Insurance Act 1995</em>.  Section 228 says;</p>
<blockquote>
<p>A life company may only avoid a life policy on the ground that the person whose life is insured by the policy committed  suicide  if the policy expressly excludes liability in case of  suicide.</p>
</blockquote>
<p><a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2011-2012/Suicide%23_Toc299625611" rel="nofollow noreferrer">This</a> 2011 parliamentary report says:</p>
<blockquote>
<p>For a death to be classified as a suicide in Australia, it must be:</p>
<p>… established by coronial enquiry that the death resulted from a deliberate act of the deceased with the intention of ending his or her own life (intentional self-harm).</p>
</blockquote>
<p>In practice, life insurance policies have an exclusion period for suicide when the policy is taken out where it is not covered; after that it is.</p>

<p>In the United States, life insurance is regulated on a state by state basis, although most state regulations follow a common model and the state regulations in the states where life insurance companies are headquartered (most often Connecticut) are particularly influential.</p>

<p>Typically, a U.S. life insurance policy is "incontestable" after two years from its starting date, which means that the insurance company cannot refuse to pay due to an inaccuracy in the information used to underwrite the policy, or due to suicide, but do not pay if there is a suicide within two years of taking out the policy. At least some states, including Colorado, as noted below, bar suicide exclusions if the death takes place more than a year after the policy is purchased.</p>

<p>This evolved after many decades of litigation, in the late 1800s and early 1900s, between survivors of people who died and life insurance companies who sought the right to refuse to pay for any inaccuracy in the information provided to underwrite the policy (even if unrelated to the actual cause of death) due to fraud, and for suicide on the theory that it was a premeditated way to cheat the company. </p>

<p>Mostly, insurance companies lost unless they could show that the inaccuracy made when the policy was applied for was the cause of death, or the suicidal ideation that caused the death was present when the policy was applied for by the insured. </p>

<p>The legislatively established bright line rule roughly captured the results of those disputes, with much less litigation cost, while giving insureds more confidence that they would not be cheated of their premiums when they died due to reasons trumped up after the death by the insurance company. </p>

<p>If suicide was a defense to paying out, every large dollar payout by a life insurance company would be investigated heavily and insurance companies would lobby coroners to make that determination of death in close cases. After all, often deaths that are basically from natural causes, such as those in a hospice, where death may be hastened but made less painful by use of heavy doses of painkillers as palliative care, could be characterized as suicide by an aggressive insurance company if it had an incentive to do so.</p>

<p>In Colorado, the relevant statute (Section 10-7-102, Colorado Revised Statutes), which is typical, states in the pertinent part:</p>

<blockquote>
  <p>(1)   It is unlawful for any foreign or domestic life insurance company
  to issue or deliver in this state any life insurance policy unless the
  same contains the following provisions: . . .</p>
  
  <p>(b)   A provision that the policy shall constitute the entire contract
  between the parties and shall be incontestable after it has been in
  force during the lifetime of the insured for two years from its date,
  except for nonpayment of premiums and except for violation of the
  conditions of the policy relating to naval and military service in
  time of war or other prohibited risks, and, at the option of the
  company, provisions relative to benefits in the event of total and
  permanent disability and provisions which grant additional insurance
  specifically against death by accident may also be excepted[.]</p>
</blockquote>

<p>Colorado's life insurance statute also provides at Section 10-7-109, Colorado Revised Statutes, in addition to the incontestability provision, that:</p>

<blockquote>
  <p>The suicide of a policyholder after the first policy year of any life
  insurance policy issued by any life insurance company doing business
  in this state shall not be a defense against the payment of a life
  insurance policy, whether said suicide was voluntary or involuntary,
  and whether said policyholder was sane or insane. Nothing in this
  section is intended or shall be construed to apply to any accident
  insurance policy insuring against accidental death or death by
  accidental means or to those parts or provisions of any life insurance
  policy insuring specifically against accidental death or death by
  accidental means.</p>
</blockquote>

<p>Similar provisions have been on the books in Colorado since at least 1910 (the oldest decided annotated case), and the requirement was held to be constitutional in 1916. <em>Weber v. Head Camp, Pac. Jurisdiction, Woodmen of the World</em>, 60 Colo. 529, 154 P. 728 (1916). </p>
