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Can Life Insurance Companies Deny Benefits If the Insured Died of a Drug Overdose?

A serious and important question in a life insurance policy case can be: Is a death caused by a drug overdose an “accident” or is it an intentional act that can permit an insurer to deny benefits under the terms of the policy?

Courts in the Sixth Circuit have wrestled with this issue for decades, but they now appear to agree that, barring evidence that the insured intended to commit suicide, a drug overdose should be deemed an accident, and not an intentional act. (Federal district courts in Tennessee are in the Sixth Circuit)

In Andrus v. AIG Life Ins. Co., (N.D. Ohio 2005), the Plaintiff was the beneficiary of her husband’s life insurance policy. The life insurance policy was governed by ERISA.  The Plaintiff was denied benefits after her husband overdosed on prescription medication, including OxyContin.  Under the terms of the life insurance policy, coverage was available only in the event her husband’s death was an accident.  The policy did not define the term “accident;” however, it excluded coverage from death caused by intentionally self-inflicted and suicidal acts.

In Andrus, the insurance company argued that the husband’s death was a “purposeful infliction of injury on himself.”  The husband had been treated previously for dependency on OxyContin, and his doctor had warned him not to take more than the recommended amount.  Based on these facts, the insurance company argued that the husband had a general idea that some kind of injury was likely if he misused OxyContin.

The court rejected the insurance company’s argument explaining that an act is intentional only if it is “purposeful towards a goal.”  As the court noted, even if the husband’s death was foreseeable, there was no evidence that he tried to kill or injure himself.  Therefore, his death was an accident.

What if a drug overdose was caused by an illegal drug, and not a prescribed one? Even if it was, the insurance company may still have to pay benefits.  In Kovach v. Zurich (6th Cir. 2009), the Sixth Circuit offered an analysis of the term “accident” as used in an ERISA plan.  The Kovach court stated that the issue is not whether the insured intended the act.  Rather, the issue is “whether a reasonable person, with a background and characteristics similar to the insured, would have viewed the injury as highly likely to occur as a result of the insured’s intentional conduct.”

In Jessen v. CIGNA Grp. Ins. (E.D. Mich. 2011), the court applied the Sixth Circuit’s analysis in determining whether the insured’s death was an accident.  In that case, the Plaintiff, a beneficiary of an accidental death benefits plan, brought an ERISA action against the plan administrator, challenging the denial of benefits after her husband died of a heroin overdose.

Echoing the argument of the defendant in Andrus, the insurance company argued that the husband’s death could not be considered an accident because he “voluntarily injected himself with heroin.”  The court disagreed, citing the circumstances of the insured’s drug use.

In Jessen, the Plaintiff’s husband had taken heroin intermittently for 20 years.  He had largely stopped using the drug for a one-year period prior to his death.  As a result, his tolerance to heroin dropped, resulting in his lethal overdose.  Based on these facts, the court determined that, although the plaintiff’s husband intended to use heroin, he did not intend to administer a lethal injection of the substance.  Therefore, the court concluded, his death “qualifies as an accident, as that term is commonly understood.”

It is not entirely clear, based on a survey of Sixth Circuit and Tennessee case law, whether a court would hold that a drug overdose is an accident in a non-ERISA case.  The Andrus and Jessen courts, however, appeared to have based their decisions largely on the plain meaning of the word “accident,” and not on principles unique to ERISA.   If their analysis is a guide, beneficiaries should have a decent chance of overturning denials of benefits based on the insureds’ drug overdoses, even in cases involving life insurance policies not governed by ERISA.