Living wills not likely to affect insurance Claims

The recent Supreme Court ruling permitting a ‘living will’ that specifies that a person should be taken off life support if he or she slips into a vegetative state or is beyond medical help is not likely to impact insurance payouts as most policies are bound to honour their terms a year after issue. There are lot of apprehensions among policyholders about whether the claims will be paid if the patient agrees to end his life. “Would it not be viewed as suicide by insurance companies to deny my children the full sum assured in case of death under these policies,” asked a 65-year-old. According to experts insurance company can deny claims if suicide takes place within 1 year of taking the policy. He said if a person commits suicide more than a year after commencement of the life insurance policy, then the insurance company is legally bound to make full payment of the sum assured to the kin of the deceased. In the past, the life insurance policy clause used to specify a period of three years- that is no claim payment would be entertained if policy holder committed suicide within three years of commencement of the policy, he said. However in case of living wills the insurer cannot deny the claim payment to the insured and it will not be treated as suicide.