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Does life insurance cover drug overdose?



If you are wondering if life insurance will cover deaths due to drug overdose, this example may provide some insight into how life insurance companies deal with drug overdose.

Heath Ledger, the actor known for "A Knight & # 39 ;s Tale", "Brokeback Mountain," and "The Dark Knight," died in 2008.

During the settlement of his estate, it became interesting when his executive collect $ 10 million in life insurance that he owned through ReliaStar Life Insurance (a Voya Company.)

How drug overdose can cancel a life insurance

Most life insurance policies include a " ] 2 year competition period "which allows the insurance company to investigate possible deaths within the first two years of coverage, to ensure that the insured did not lie or distort himself on the original application.

Reliators refused to pay the death benefit at Ledger's death, as he died within two years of the policy issue date and died under suspicious circumstances.

Never Lie on a Life Insurance Application

Why is this important? Here's how it went down:

Ledger bought the policy in June 2007, and died just 7 months later from an alleged, unintentional overdose of drugs in January 2008.

This clearly falls during the policy's two-year competition period .

It gave Reliastar the right to make a thorough investigation of his death and to review his original application for errors.


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Reasons to deny life insurance due to drug overdose

Some possible results from the life insurance company's investigation of drug overdose would be:

Suicide

If they decided that Ledger's overdose was intentional and that he died of suicide, they could deny the claim completely.

Most insurances contain a 2-year suicide provision where the policy does not pay for suicide within the first two years after issuance. In this case, the insurance company's responsibility would only be to repay the amount paid to them.

Lying on the application

If they found that Ledger had lied about his drug use on the application (insurance fraud), they could not "dispute" the claim, or in other words, not pay it out.

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Material Misrepresentation

If they found ANY other "material misstatement" in the application, they could have denied the allegation, although this misrepresentation had nothing to do with the cause of his death. For example, if they had found out during their investigation that Ledger had smoked cigarettes and had lied about it in the application, they could have denied the claim, even though he did not die of lung cancer.

Message: Never lie, never about ANYTHING in any insurance application.

Life insurance providers may delay payment

Reliators did not pay out immediately because they had about $ 10 million to investigate first.

Sources say that Reliastar wanted to be careful and ensure that suicide was not involved. (BestWire, October 1, 2008)

But I think Reliastar hid the real reason why they investigated not to draw Ledger's name through mud.

The more likely concern they had was that Ledger had originally lied 7 months earlier on his application for all illegal drug use. You're telling me that a guy who's dying of a drug overdose hasn't done drugs in a while? It is possible, but not likely.

And as I said, if he had lied about the application, it would be another reason Reliators could refuse his payment.


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Quotes are fast, easy, and free! [19659042] How long does it take for life insurance companies to investigate drug overdoses?

Although Reliastar clearly acted within its legal rights to investigate and refuse immediate payment to Ledger's property, Ledger's guardians filed an action against Reliastar.

… this really put Reliastar (then owned by ING) in the spotlight and gave them some BAD PRESSURE.

People who have no idea what the policy says naturally tend to resist the insurance company in these situations. [19659002] But let me tell you straight away that I'm on ReliaStar & # 39 ;s page here.

They should have had the right to investigate!

The insurance company has no fixed time to carry out its investigation. in such cases, but they should have done so could take several months without getting a trial.

Typically, an operator's investigation may include a request for medical records, an autopsy report, and a statement from the agent. In addition, the carrier can set aside the deceased's friends and family members for questioning, as can Mary-Kate Olsen in this case.

Was Heath Ledger's drug overdose policy paid out?

An agreement was finally reached.

It seems that Ledger's (then) 2-year-old daughter, Matilda, received a $ 10 million death benefit from ReliaStar Life Insurance Co., rather than anything else.

In the Ledger case, ReliaStar acted correctly. Since he died during the competition period, there were at least three ways they could have gotten off the hook from paying this claim, so they had about 10 million reasons to do their investigation.

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What can we learn from this?

  1. Do not lie about your application
  2. Do not take drugs and overdose and leave your children without a father
  3. If an insurance company pulls your feet or does not pay a claim, unscrupulous lawyers can attack the insurance company with unfounded lawsuits resulting in someone form of payment. Ruefully!

I think ReliaStar got a raw deal here with all the negative publicity they got when they acted within political guidelines.

Ledger died in June and a lawsuit was brought against them just two months later . There is not enough time to carry out the thorough investigation to which they were entitled.

I hope Heath Ledger's death does not lead to more unjustified lawsuits against life insurance companies.

* While doing all we can to keep our site up to date, be aware that "current" information on this site, such as quotation estimates or relevant company information, may only be accurate from the last day of editing. Huntley Wealth & Insurance Services and its representatives do not provide legal or tax advice. Please contact your own legal or tax advisor.


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