Odd And Unusual Circumstances Where Life Insurance Is Or Isn't Paid Out

Posted on: 15 March 2017

When you buy life insurance, you do so under the assumption that you will live a long, healthy life, and the money from the policy will help your family after you are gone. However, as nighttime news specials often reveal, spouses have other plans for each other when it comes to life insurance. How often does that really happen? What are the odd and unusual circumstances where a life insurance company does or does not pay out? Answers to these questions and more follow.

Murdered or Killed in an Accident

If you are killed in an accident, and it is clearly an accident (freak occurrence or no), your beneficiaries named in your policy will receive the benefits from your life insurance. It could be something as "simple" as a car accident to something as complex as falling into a pool that has been electrified by a fallen telephone pole in a storm. Whatever the circumstances of the accident that causes your death, once it is proclaimed an accident, the insurance company pays out.

Murder, on the other hand, is a different sort of situation. Most life insurance companies do not pay out to beneficiaries who are complicit in your death. It is akin to rewarding them for committing a crime, which is why most, if not all, insurance companies make it company policy to not pay out when a policy holder has been the victim of a homicide. However, there are some loopholes, such as naming others as beneficiaries who are too young to understand what this crime is about and then making sure they inherit the benefits through a trust.


Suicide is almost always a no-pay situation with life insurance companies. Since most suicides in the past have occurred such that surviving family members received life insurance benefits, life insurance companies began making it a policy that suicide is not a "natural or unnatural death" covered under policy terms. This is not a well-known fact, and you should always check the fine print on your policy regarding types of deaths covered (even though you would never consider this as an option anyway).

Your Death Is Labeled "Undetermined"

When the cause of death is labeled by a coroner as "undetermined" and/or there is an ongoing investigation surrounding a death, the insurance company will wait until the investigation is complete and/or the coroner has made a final proclamation. This could take months or years. While this is much rarer than other unusual circumstances, it is one of those things to consider when you are examining different life insurance policies to buy.