Replacing Life Insurance Policy Triggers Change in Suicide Coverage
October 16, 2019 by Larry P. Schiffer
Replacing life insurance has ramifications. In a recent Third Circuit case, the ramifications resulted in the loss of full policy benefits.
In Lomma v. Ohio Nat’l Life Ass. Corp., No. 18-2675, 2019 U.S. App. LEXIS 30151 (3d Cir. Oct. 8, 2019), the insured had a universal life insurance policy in effect since 1986. In August 2007, she applied with the same insurer to replace the universal policy with a term life policy. The insurer advised her that by replacing her existing policy her suicide coverage may change.
The replacement policy included a suicide exclusion, providing that if the insured killed herself within the first two “contract years,” the death benefits would be limited to a return of the premiums paid. In May 2009, the insured committed suicide and the insurer determined that the beneficiaries were entitled to a refund of the premiums only.
Click HERE to read the full story via National Law Review.
