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Life Insurance and Painkiller Overdoses: Understanding Coverage

Tens of thousands of people die annually from drug overdose, and life insurance may pay a benefit. Overdoses are often intentional and may involve prescription or recreational drugs. When an overdose occurs, life insurance companies investigate to determine if they should pay the beneficiaries. The process seems simple, yet the coverage for an overdose is not always easy to discern. How do life insurance companies view an accidental overdose? We answer that and more.

What is an accidental overdose?

The definition of an accidental overdose varies among organizations and legal entities.

The Alcohol and Drug Foundation describes an accidental overdose as taking the wrong medication, taking too much medication, or a medication reacting with another medication or alcohol. The Maine legislature defines accidental drug overdose as a self-administered overdose outside of a healthcare facility.

An overdose can involve illicit drugs, alcohol, prescription medications, or over-the-counter drugs such as painkillers or supplements.

Accidental overdoses sometimes happen because of mistakes or poor judgment. An intentional overdose is generally connected to self-harm or a suicide attempt.

Definitions become very important when a person who is covered by a life insurance policy dies from an accidental overdose. Life insurance is a legal contract between an insurer and the policyholder to pay a sum for a covered loss. Even though life insurance policies are wordy and lengthy, it is not always clear whether an overdose is a covered loss.

Drug overdose: does life insurance pay?

Life insurance policies offer financial protection for your loved ones, yet they do not pay out in every situation. They are primarily designed to cover deaths caused by illnesses and accidents.

In general, life insurance policies have a suicide clause. This means the life insurance policy will pay out after a death by suicide once the contestability period is over. A contestability period gives the insurer the right to investigate the information the customers gave at the time of the application. If the insurance company finds fraud or inaccuracies, they can decline a claim and cancel the policy. The contestability period usually lasts for two years.

Life insurance policies generally allow insureds to add a rider for accidental death and dismemberment (AD&D). Is an overdose considered an accidental death?

AD&D riders commonly state the following exclusions:

  • The insured dies by suicide, or someone murdered them.
  • The insured's negligence caused the accident.
  • Medical care or medication caused the injury or death.
  • The insured had an illness or pre-existing condition that caused the death.

Life insurance policies may also contain exclusions for the following situations:

  • The overdose was self-inflicted.
  • The overdose occurred while the insured committed a felony.
  • The overdose occurred while the insured was under the influence of illegal drugs.
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Federal and state governments are concerned that overdoses are increasing. At the federal level, the Employee Retirement Income Security Act of 1874 (ERISA) governs insurance plans issued by employers. ERISA outlines the responsibilities of an insured who is fighting a claim denial. For example, ERISA requires insureds to follow the insurance company's appeals process before bringing a lawsuit against the insurance company to court.

Various states have also taken action to address accidental overdose prevention, which may have an impact on cases involving deaths by suicide. For example, Maine’s definition of an overdose may come into play to determine whether a case was an accidental or intentional overdose.

Two case studies: death by overdose

How do legal precedents answer the question, “Does life insurance cover overdose?” A review of two case studies will show some of the legal challenges loved ones may face when collecting a life insurance claim payment.

In the case of Weil vs. Federal Kemper Life Insurance Company, the mother and sister of a man who died from a cocaine overdose filed a lawsuit against the company as beneficiaries of the policy.

Their son and brother had a group life insurance policy with a face amount of $100,000 and an AD&D rider for an additional $100,000.

Kemper paid the $100,000 face amount but denied the additional $100,000 for the AD&D rider. The family members sued the company for breach of contract as they believed the death was accidental.

Kemper defended its actions by saying the death was not accidental as the man took the cocaine voluntarily. Kemper’s AD&D clause also stated that the loss must have occurred through external, accidental, or violent means, and it could not be in connection with a felony.

The family argued that their family member didn’t intend to cause his death. They also argued that his death wasn’t caused by cocaine, which is a felony. Rather, they alleged he died by ingesting cocaine, which is a misdemeanor.

The beneficiaries lost their case and the subsequent appeal.

In Yates v. Symetra Life Insurance, a man died of a heroin overdose. His wife sought coverage under her husband’s group-sponsored life insurance plan which had an AD&D rider. Once again, the insurance company paid the claim at the face amount but denied payment under the AD&D rider. The man’s wife brought the case to court.

The insurance company concluded that the death was not accidental. Furthermore, they alleged that the wife hadn’t followed due diligence in requesting a review of the findings, as noted in her denial letter.

Ruling in the wife’s favor, the court deemed that her husband’s death was accidental. They further stated that she did not have to exhaust all remedies before bringing her case to court.

Insurance claim denial: what you can do

Whenever an insurance company denies a claim, they will provide a written explanation and outline the steps you need to take to appeal their decision. Often, it is a matter of providing additional documentation (death certificate, medical records, autopsy reports, etc.) and asking the company to reconsider its decision.

In speaking with the insurance company, do your best to look past your grief and stick to the facts. If the insurer denies the claim and you have exhausted all non-legal remedies, you may seek legal advice. An attorney may be able to get a resolution through arbitration, mediation, or a trial.

Considering legal battles are time-consuming, it is important to pursue legal avenues promptly. Life insurance disputes can take months or years to settle once they enter the court system.

Getting support after a loss by overdose

The aftermath of losing a loved one by overdose is emotionally taxing. It is essential for the family members left behind to take care of their physical and emotional health in the days and months following the death.

Many people find it helpful to attend grief counseling to help them cope with the loss of a loved one. Support groups may be beneficial as they bring people together with shared common experiences.

Support groups can also help loved ones understand more about overdoses and how to carry on after losing someone they love.

Here are support groups that may help:

  • Partner to End Addiction – Offers peer parent coaches for parents who have lost a child due to substance abuse.
  • Compassionate Friends – Offers support groups for parents who have lost a child regardless of the cause of death.
  • National Alliance on Mental Illness (NAMI) – As addiction and mental health are often intertwined, NAMI offers a nationwide base of family support groups.
  • Group Recovery After a Substance Passing (GRASP) – Offers support and compassion for people who have lost someone they love because of addiction or overdose.
  • Eluna Network – Offers camps and other programs for families affected by grief or addiction.

Key takeaways:

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