The debate over physician-assisted suicide,
brought into the public eye by Dr. Jack Kevorkian, stands as one of the
most hotly contested issues today. Many questions surround the issue,
but the question of whether life insurance policies will pay out to
policyholders who opt for assisted suicide is one that has not been
widely addressed.
Twenty-five states have tried to adopt legislation that would make
doctor-assisted suicide legal, but only Oregon has succeeded. Oregon's
law went into effect in October 1997 and outlines the legal safeguards
for physicians aiding in the death of a patient. Measure 16 — as the
act is known — specifically states that the sale of life insurance policies
should not be affected by physician-assisted suicide. The measure goes
on to say that the act of assisted suicide should not affect the
payouts of a person's life, health, or accident insurance. Most life insurance
policies contain something called a contestability clause. It generally
states that within a two-year period of purchase, the insurance company
will not pay out if the policyholder commits suicide. However, after
that two-year period is up, the policy will pay out, regardless of when
the person dies. This grace period exists in every state, but Oregon
goes further. Oregon's Measure 16 says that if a person who is
terminally ill buys a life insurance policy and then commits
physician-assisted suicide within the contestability period, the
insurance policy still has to pay out. "But the odds of that happening
are very small," said John Mangan, assistant vice president for public
affairs at Portland, Ore.-based Standard Insurance Co. Mangan echoed
other insurance industry sentiment when he said the adoption of this
legislation by other states would mean a shift in public opinion, and
not a hit to life insurers' pocketbooks. If an applicant is truthful about his or her medical
conditions when applying for insurance, there is little likelihood that
a policy would be issued for someone with a terminal illness. On the
other hand, lying about your medical condition would mean the policy is
void due to fraud, which means no payment would be made.
"Looking at the political landscape now, no politician wants to touch
this. No one wants to upset the strong religious conservative lobby out
there," said Barbara Lee, director of Compassion and Dying Federation,
an organization that helped draft the legislation in Oregon. Lee said that other states should seriously consider adopting
their own version of Measure 16 because it would clarify the issue of
assisted suicide and insurance payouts. "I think [the legislation] is
fair and compassionate and it meets the needs of dying people," Lee
added.
Physician-assisted suicide may have little impact on an insurer's
bottom line, but has the industry taken a stance on the matter? "Normal industry practices have addressed the issue that
Kevorkian brings up already," said Jack Dolan, spokesperson for the
American Council of Life Insurance, a lobbying group for the life
insurance industry. Most life insurance policies use the contestability
clause to address any kind of suicide. "The issue would have to play
out a little bit more for there to be any grist for a discussion," he
added. "Assisted suicide is a slice of something we don't
differentiate in," said Bill Werfelman, spokesperson for the New York
Life Insurance Co. Werfelman explained that New York Life will pay out
regardless of whether someone commits regular suicide or assisted
suicide, provided the policy is past the contestability clause limit. "Most of our life insurance policies have the
contestability clause," said Joe Sazzino, spokesperson for The
Hartford. Sazzino said that standard procedure is to include a clause
in the policy language that says if there's suicide after the first two
years of the policy, payout will happen. The Hartford offered no
official comment further than their insurance policy guidelines.
However, one spokesperson did say that doctor-assisted suicide is a
topic for the insurance industry to watch in the coming months. "I'm not aware of any working group that's talking about
this because I'm not sure if there's a problem with it now," added
Terry Vaughan, Iowa Insurance Commissioner and chair of the life
insurance committee of the National Association of Insurance
Commissioners.
Though
life insurance policies address the issue of suicide with the
contestability clause, the life insurance industry has not seen a need
to clarify its stance on the doctor-assisted suicide issue. However, as
an Oakland County, Michigan, prosecutor charges Dr. Kevorkian with
murder, the insurance industry may have to solidify its position on the
issue of doctor-assisted suicides. "In light of recent events, we
certainly will have to keep a close watch on what happens," Werfelman
said.
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