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Suicide Exclusions in Life Insurance Policies: What Happens When the Cause of Death is Uncertain

Many life insurance policies contain  exclusions that prevent the recovery of any benefits if the insured commits suicide.  (In many policies, the suicide exclusion is only effective for two years from the date of issuance of the policy.)  Under Tennessee law, if there is inadequate proof to determine if the death was by accident or suicide, or if the proof is conflicting or equally balanced, courts will presume the death was an accident.   This is an important rule because, in many cases, it is not clear how the insured died.

For example, in Smith v. Prudential Ins. Co. of Am., 2012 WL 405504 (M.D. Tenn. 2012), facts in the record indicated both that Gary Smith, the life insured (“Smith”), committed suicide, and that he died accidentally.  The Defendant (“Prudential”) argued that Smith staged his suicide to make it look like a hunting accident, and noted that the medical examiner ruled Smith’s death a suicide.  In further support of its theory that Smith took his own life, Prudential also pointed to the nature of the contact wound, the location and direction of the shot, and to the fact that Smith was an experienced hunter who Prudential asserted was too skilled to have shot himself accidentally.

Prudential also argued that Smith had a motive to take his own life because he was faced with sudden and overwhelming debts triggered by a disastrous business partnership.  The insurer also rested on the fact that he died just five weeks after doubling the limits on his life insurance policy.

Responding to Prudential’s argument, the plaintiffs in the case pointed to evidence that Smith did not commit suicide, including the fact that he had a stable family life, was planning a 20th wedding anniversary, and did not engage in any erratic behavior or exhibit any signs of depression.  Plaintiffs also argued that Prudential overstated Smith’s financial struggles.

Based on its theory of the case, Prudential filed a motion for summary judgment asking the court to dismiss Plaintiffs’ claims.  The court, however, ruled against Prudential.   Although it characterized its decision as a “close call,” the court stated that the manner of Smith’s death was “for the jury to decide.”

The court stated that, as a starting point, “Tennessee recognizes a presumption against suicide.” As a result of that presumption, the court explained, once the plaintiff shows that the insured died under circumstances that could be considered accidental, the burden of proof is on the defendant-insurer to show “by fair preponderance of the evidence” that the death was caused by suicide.  In other words, in a “close call,” under Tennessee law, the plaintiff will get the benefit of the doubt.

The Smith case, however, does not mean that the insurance company cannot establish, through circumstantial evidence, that the insured took his own life.  For example, in Mutual Benefit (1938), the Supreme Court of Tennessee overturned a jury’s verdict that the insured’s death was the result of an accidental shooting.  Just like in the Smith case, there were circumstances that indicated the insured did not intend to take his own life.  For example, the insured received a haircut hours before he was found dead, and people who saw him that day observed that he did not act out of the ordinary in any way.  The court, however, rejected the plaintiff’s theory that the insured killed himself while cleaning his own gun based on the location of the bullet wound. The court also cited other evidence pointing to suicide including the fact that the insured had recently filed for bankruptcy.

Both Mutual Benefit and Smith are remarkably similar cases (despite being separated by nearly 80 years), and yet the court ruled in favor of the insurance company in one, and in favor of the life insurance policy beneficiaries in the other.  Suicide exclusion cases are uncertain, as the above cases show. If you are a beneficiary of a life insurance policy who is facing a denial based on a suicide exclusion provision, you should consult with an attorney experienced in handling life insurance cases.