‘Suicide clause’ won’t apply to deaths under new isle law

Question: Regarding dying with dignity, will this be an out for insurance companies not to pay off life insurance policies due to what they classify as a suicide?

Answer: No. Hawaii’s law forbids it, and an industry spokesman says life insurers wouldn’t be inclined to do it anyway. “We are not interested in denying benefits to terminally ill people who exercise this option. In fact, many of our members offer accelerated death benefits to allow terminally ill people to access their policy benefits before they die,” said Jack Dolan, a spokesman for the American Council of Life Insurers, a Washington, D.C.-based trade association. Companies that belong to the ACLI account for 95 percent of all life and annuity payments made in Hawaii, according to the association, which Dolan said did not take a position on Hawaii’s legislation.

Although many people assume otherwise, death by suicide generally does not disqualify a life insurance payment, unless the suicide occurs within two years of the policy’s purchase, Dolan and other experts said. Companies are so thorough in their underwriting, they confidently issue policies with few limitations, one of which is this “suicide clause.”

Moreover, Hawaii’s aid-in-dying law (808ne.ws/hiaid) states that the person’s death certificate shall list the terminal illness as the immediate cause of death and that actions under the law “shall not, for any purpose, constitute suicide, assisted suicide, mercy killing, murder, manslaughter, negligent homicide” or any other criminal conduct. The law also says that there shall be “no effect upon a life, health or accident insurance or annuity policy” of a qualified patient.

The law, which takes effect Jan. 1, allows Hawaii adults medically certified to suffer a terminal illness expected to kill them within six months to obtain a prescription to end their own lives.

“The ‘Our Care, Our Choice Act’ in its current written form should not affect life insurance policy payouts,” said Hawaii Insurance Commissioner Gordon Ito.

Hawaii’s law uses language similar to that in other states’ aid-in-dying (AID) laws, and the verbiage is essential, according to at least one legal expert. “One of the most important assertions in the AID laws is that taking AID drugs under these laws is not suicide, homicide or assisted suicide. While critics of these laws might dispute this characterization, this statement is profound because it helps to assure that those who take AID drugs or who ‘participate’ under these laws are not engaged in a criminal act. Significantly, such actions will not affect the availability of insurance (life insurance, in particular). Furthermore, a death from consuming AID drugs is deemed a natural death from the underlying disease, and actions taken in accordance with the law cannot form the basis for a neglect or elder abuse claim,” San Francisco attorney Pamela S. Kaufmann wrote for the American Bar Association in October (808ne.ws/abaaid).

Besides the “suicide clause” covering intentional deaths within two years of a policy’s purchase, life insurers generally can contest a payout for someone who dies of any cause within two years of purchasing the policy. This “contestability period” helps ensure that people tell the truth about their health and habits on life insurance applications. This clause doesn’t guarantee that an insurance company will deny a claim, but allows it to determine whether the policyholder withheld information required on the application.

So, it seems that the duration of a life insurance policy — being in force for two years or more — is more important than the cause of death, whether the death is classified as a suicide or not.

Write to Kokua Line at Honolulu Star-Advertiser, 7 Waterfront Plaza, Suite 210, 500 Ala Moana Blvd., Honolulu 96813; call 529-4773; fax 529-4750; or email kokualine@staradvertiser.com.