Rejected Life Insurance Payout for “Suicide by Cop” Case
Free Insurance Comparison
Secured with SHA-256 Encryption
UPDATED: Dec 17, 2019
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
Do life insurance really pay out their claims?
While my typical answer is a resounding “Yes,” rare denial stories like the one below do happen.
In this article, we’ll cover why this widow’s payout was rejected and what we can learn from this.
Utah Widow’s Payout Rejected in Husband’s Cop Shooting Case
Here’s how the story unfolds.
Vincent Farrand took out a life insurance policy with AIG in 2011 with a face value of $500,000.
He named his wife Molly Farrand as beneficiary.
In 2014, which was 3 years later, police were called to the couple’s residence. Mr. Farrand appeared to be intoxicated and was carrying a handgun. Police allege they told him several times to drop the weapon.
While walking toward a gate in the backyard, police contend he continued to carry the gun and was mumbling something similar to ‘Shoot me. You’re going to have to shoot me.’ Farrand was eventually shot and killed by police.
The autopsy of Mr. Farrand also revealed that he had 0.21% alcohol content at the time of his death.
Molly Farrand contends that her husband was in the process of lowering the weapon. It should be noted that it is legal to carry a handgun in Utah because it is an ‘open carry’ state. She filed a civil action against Centreville for $2 million dollars.
The municipality settled out of court for $127,000 but made clear that it did so with no admission of fault of the part of the police officer.
Ms. Farrand submitted her life insurance claim to American General who denied the claim.
In a letter to her dated August 18, 2014, the company claimed that her husband was suicidal and legally impaired.
Subsequently, a suit was filed by Ms. Farrand’s attorney for the face amount of the $500,000 life insurance policy.
“Suicide By Cop” – A Tough Decision for an Insurance Claims Department
Many life insurance experts are a bit perplexed by AIG’s refusal to pay the claim.
When does the issue of suicide become an issue?
The majority of life insurance policies clearly include suicide as an exclusion from paying out a claim. The problem is, this exclusion has a 2 year limitation. If an insured commits suicide more than 2 years after the policy came into effect, the life insurer legally has to pay the claim.
Furthermore, why does drunkenness affect a payout?
In this instance, even if Mr. Farrand was trying to commit ‘suicide by cop’, the incident took place 3 years after his life insurance policy came into effect. The gun he was carrying is not relevant because it was his legal right to do so, nor is the fact that he was intoxicated at the time.
The bottom line is, it appears that AIG was in the wrong in these particular circumstances. They do not appear to have any legal basis for not paying the claim.
Note: One possible explanation for AIG’s refusal would be if this was an accidental policy (which only pay out for accidental deaths.) In that case, the alcohol and possible suicide would both be grounds for possible denial.
Many readers might think – ‘Well this is typical isn’t it?’
Actually, no. The majority of life insurers do pay their claims. As with any policy, there are exclusions that apply, such as being untruthful when you apply for life insurance or engaging in an activity which is especially hazardous for example.
If you want to learn more about whether life insurers pay their claims then you should read this article “Do Life Insurance Companies Really Pay Their Claims.”
We think you will be pleasantly surprised!