How does life insurance affect a wrongful death claim?

Catastrophic Injury/Wrongful Death - April 21, 2022

Many people buy life insurance policies to provide financial protection to their loved ones after their death. However, if your loved one died due to another person or entity’s negligence, you may wonder if you should file a wrongful death claim, too.

The skilled Chicago wrongful death lawyers with Horwitz, Horwitz & Associates answer questions about wrongful death and life insurance below.

Does filing a wrongful death claim affect a life insurance claim?

Filing a wrongful death claim should not affect a life insurance claim payout.

Similarly, a life insurance claim payout should not affect a wrongful death claim.

Do you believe your loved one died due to another person or entity’s negligence? We encourage you to contact a Chicago wrongful death lawyer from our firm. Our attorneys understand the uncertainty, stress, and financial burden you may be facing during this difficult time.

Let us help you understand your potential legal options during a free consultation.

Common life insurance exclusions in Illinois

Every life insurance policy contains cause-of-death exclusions. These exclusions may make it impossible for you to get a life insurance claim payout.

Illinois has three mandatory exclusions for life insurance policies. A life insurance company may deny life insurance benefits if the insured dies as a result of:

Suicide within the first two years of the policy
War or act of war while serving
An aviation accident, excluding fare-paying passengers on commercial flights

Life insurance policies may have more exclusions, too. For example, a life insurance company may deny benefits for death caused by risky activities, specific third-party actions, and medical malpractice.

Risky activities and third-party actions

Your loved one’s life insurance policy may contain an exclusion about death caused by risky activities or activities with increased potential for injury or death. Each policy will specify which dangerous activities it excludes. Examples of risky activities may include, but are not limited to:

Skydiving
Scuba diving
Motorcycle, car, and boat racing
Aviation
Certain occupations (i.e. construction workers, first responders, natural resources workers)

What is a third-party action? Consider this example: The deceased died in a non-commercial aviation accident due to pilot negligence. This is a third-party action. Non-commercial aviation accidents generally fall under cause-of-death exclusions.

Because of this, the family may be unable to recover life insurance benefits.

Medical malpractice

The life insurance company might try to deny benefits if your loved one died due to medical malpractice or negligence. Life insurance companies often deny medical malpractice claims by citing exclusions of pre-existing conditions, sicknesses, or elective procedures.

The life insurance company may also claim that the deceased person has an accident-only policy.

Why you should consider filing a wrongful death claim

The life insurance company denies benefits

Did the life insurance company deny you benefits? If so, then your family may be able to recover compensatory damages through a wrongful death lawsuit.

The life insurance policy may not cover all expenses

The life insurance payout may not provide enough funds to cover all the costs you are now facing. A few common costs may include your loved one’s medical bills, home expenses, and funeral expenses.

You may recover compensation not included under the insurance policy

The life insurance policy may not account for your loved one’s lost future income and earning potential. It may also not account for non-economic damages, such as pain and suffering due to your loss and compensation for loss of companionship.

However, you may be able to recover compensation for these damages through a wrongful death lawsuit.

You may be able to hold the responsible parties accountable for your loved one’s death

Another reason families decide to file wrongful death lawsuits is to pursue justice on behalf of their loved ones. Life insurance claims do not do this.

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