Suicide clause

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As suicide clause (even suicide clause , outdated "suicide clause"), the provision of life insurance - contract referred to which the payment or non-payment of the sum insured at suicide of the insured is regulated.

content

The suicide clause often stipulates a waiting period from the conclusion of the contract . If the insured person commits suicide during the waiting period, only the surrender value of the insurance will be paid out, i.e. essentially the premiums paid to date less sales and administrative costs. The full sum insured is only paid out after the waiting period has expired.

In addition to the length of the waiting period, suicide clauses differ in dealing with suicide in a state of mind that restricts free will . The subsequent determination of the existence of such a restriction is a difficult task for forensics , psychiatry and insurance medicine , which is regularly resolved by expert opinions in a legal dispute .

If a dying or seriously ill insured person makes use of euthanasia , the applicability of a suicide clause is at least legally controversial. On the one hand, there is intent when appointing a third party to be an active euthanasia insofar as the insured person is still in possession of the mental powers. As a result, this would allow it to be classified as a suicide. On the other hand, it seems ethically questionable to force a dying person to spend the last weeks of his life in pain in order not to jeopardize the security of his family if the result is death one way or the other . The assessment becomes even more complicated if the euthanasia is himself a beneficiary of the life insurance, either directly as a beneficiary or indirectly as an heir .

In the case law, the burden of proof for the existence of a suicide and for the restriction of free will is placed on either the insurer or the beneficiary.

purpose

Through an insurance clause, insurers can exclude persons from the benefit whose decision to commit suicide has already been made when the insurance contract is concluded and who want to look after their surviving dependents at the expense of the community of insured persons. A corresponding possibility would be a form of moral hazard . Similarly, fire insurance will not pay if the policyholder willfully set fire to the insured house after signing the contract . In addition, it is argued that providing cover for the surviving dependents that is readily and immediately available would further strengthen the tendency to commit suicide, which cannot be in the interests of the legal system.

Contractual and legal regulation

The suicide clause can usually be found in the insurance conditions or in the general insurance conditions (AVB), in many countries it is also regulated by law.

Germany

In Germany, the suicide clause is stipulated by law in Section 161 VVG (2008) ; Since the 2008 amendment to the law, the waiting period has been set at three years.

Before 2008, § 169 VVG (old version) regulated the exclusion of benefits without a waiting period. For insurance contracts that were concluded before the VVG amendment came into force on January 1, 2008, the old statutory provisions on this point continue to apply. However, even before 2008, most German insurers had included appropriate waiting periods in their conditions. The general terms and conditions for term life insurance of the General Association of the German Insurance Industry (GDV) as of October 25, 2012 fully implement the requirements of the reformed Section 161 VVG (2008), but do not go beyond them.

Austria

In Austria, Section 169 VersVG basically exempts the insurer from paying benefits in the event of suicide, but the three-year waiting period has also prevailed in the practice of insurance conditions. The model conditions for personal insurance of the Association of Insurance Companies Austria (VVO) stipulate a period of three years "after conclusion, restoration or a change to the contract that extends the insurer's obligation to provide benefits", within which only the surrender value or the value of the actuarial reserve is paid out in the event of suicide . After that, full work is done. If the suicide was committed within the waiting period in a state of pathological disorder of mental activity that precludes free will determination, this suicide clause does not apply, i. H. the sum insured is paid out in full. However, the burden of proof lies with the beneficiary.

Switzerland

In Switzerland, the waiting period is set to three years. A 1979 published comparative study of suicidality of life insured and the total population went to the question of why all deaths declined from 1970 to 1974 in Switzerland about 2% in the general population to suicide, while in general the figure was three times higher the life insured.

Other countries

In a number of countries with an Islamic majority of are as defined Islamic finance insurance under the laws of Shari'a not only available, but also completed in large numbers and government regulation. This is particularly the case in Sudan , Pakistan , Iran , Saudi Arabia and Malaysia . The Islamic form of life insurance is known as takaful and is practically a form of mutual insurance . According to the Islamic rules for takaful there is no general ban on paying out in the event of suicide. However, some takaful providers exclude the payment entirely in this case, or require a waiting period of one year after completion.

history

The term life insurance in the modern sense originated in the late 16th century in England. The first documented life insurance was taken out in London in 1583 on the life of "William [s] Gybbon [s]" with a term of one year. Gybbons died 364 days later and the insurance company refused to pay out. The contract was handed down through the following civil process. These early life insurances were taken out between personally known business people or artisans (guilds, traders, etc.) whose business relationships were based on reputation and trust.

That changed with the skyrocketing number of fire and death insurance policies at the beginning of the 18th century. London's largest hand-in-hand insurance company at the time held more than ten thousand fire policies in the 1720s. Under such circumstances, it was impossible for the directors and underwriters of an insurance company to personally know each insured person and his / her reputation. The resulting form of moral hazard was quickly recognized: adverse selection (sick people are more likely to take out life insurance than healthy people) and dedicated fraud . The insurer's response was, in addition to the examination of the applicant by doctors and consultation with trustworthy persons from the applicant's environment (e.g. pastors or notaries), reinsurance and tightening of the payment conditions.

Suicide clauses soon prevailed that excluded payment in the event of death by one's own hand or in the event of an execution . These clauses also partially excluded payment in the event of death as a result of a duel , which, like a crime with the death penalty, was regarded as a result of one's own conduct. In 1769, after a long debate, the London Assurance introduced a suicide clause for all contracts. The definition of suicide, however, depended on the official explanation of the cause of death. If a death by one's own hand was considered a “felo de se” (crime against oneself), not only did life insurance expire, but the deceased lost the right to a “Christian burial” and his legacy became state property. These rules were similar to those applied to executed criminals.

In pre-independence America, life insurance sales began through the Presbyterian Church , which in 1759 founded the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers , which offered life insurance to Presbyterian pastors. This date is considered to be the beginning of the life insurance industry in the United States. By the late 1760s, life insurance was also available outside of the church. More than twenty life insurance companies were established between 1787 and 1837, but only five of them survived. The contract conditions of the American insurance companies initially resembled the English models to the last word. The standard contractual terms of the Massachusetts Hospital Life Insurance Company, founded in 1823, contained the following passage:

"... in case he shall die by his own hand, in, or in consequence of a duel, or by the hands of justice, [...], this Policy shall be void, null, and of no effect."

"... should the insured person die by their own hands, in or as a result of a duel, or through execution as a result of a court judgment [...], this policy is void."

- Proposals of the Massachusetts Hospital Life Insurance Company, to Make Insurance on Lives (1823)

Although the policies of other life insurers contained similar clauses, the rejection of survivors' claims on the basis of such a suicide clause was difficult to enforce.

literature

Cultural and economic history publications:

  • Sharon Ann Murphy: Security in an uncertain world: Life insurance and the emergence of modern America . University of Virginia, Charlottesville 2005, UMI no. 3161249. (dissertation)
  • Sharon Ann Murphy: Investing in Life: Insurance in Antebellum America . Johns Hopkins University Press, Baltimore 2010, ISBN 978-0-8018-9624-8 . (Revised and abridged version of the dissertation.) On the subject in particular Chapter 3 (" Preventing Moral Hazard and Insurance Fraud "), p. 92.

Economic publications on the interaction between life insurance and suicidality :

  • Joe Chen, Yun Jeong Choi, Yasuyuki Sawada: Suicide and Life Insurance (PDF file; 371 kB) . Center for International Research on the Japanese Economy, University of Tokyo, April 2008. (Discussion paper CIRJE-F-558)
  • Monetary Incentives . In: Joe Chen, Yun Jeong Choi, Kohta Mori, Yasuyuki Sawada, Saki Sugano: Socio-Economic Studies on Suicide: A Survey . Center for International Research on the Japanese Economy, University of Tokyo, July 2009, pp. 18-19. (Survey article CIRJE-F-629)
  • Hsin-yu Tseng: The Effect of Life Insurance Policy Provisions on Suidide Rates . In: Ders .: Three Essays on Empirical Applications of Contract Theory . University of Chicago 2006, UMI 3219594, pp. 45-70. (PhD thesis, supervisors Steven Levitt and Alvin H. Baum)

Insurance medical publications:

  • S. Akermann: The suicide in life insurance: Evaluation of suicide cases . In: Insurance Medicine . Vol. 49, No. 6 (December 1997), pp. 195-202. PMID 9490517 .

Comments on § 161 VVG:

Individual evidence

  1. ↑ C. Cording, H. Saß: Assessment of the “free will determination” in the case of suicide in life insurance . In: The neurologist . Vol. 80 (September 2009), No. 9, pp. 1070-1077, doi : 10.1007 / s00115-009-2796-z .
  2. ↑ H. Mittmeyer, N. Filip: Criteria for assessing the determination of free will in the event of suicide . In: Insurance Medicine . No. 49 (1997), pp. 109-11, ISSN  0933-4548 .
  3. ↑ James Davey, John Coggon: Life Assurance and Consensual Death: Law Making for the Rationally Suicidal . In: The Cambridge Law Journal . Vol. 65, No. 3 (November 2006), pp. 521-548, doi : 10.1017 / S0008197306007215 .
  4. ↑ a b Joe Chen, Yun Jeong Choi, Yasuyuki Sawada: Suicide and Life Insurance  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. (PDF file; 371 kB)@1@ 2Template: Dead Link / www2.eu-tokyo.ac.jp   . Center for International Research on the Japanese Economy, University of Tokyo, April 2008. (Discussion paper CIRJE-F-558)
  5. ^ § 161 suicide . In: Theo Langheid, Manfred Wandt (ed.): Munich Commentary on Insurance Contract Law: VVG , Volume 2 (commentary on §§ 100-191 VVG). CH Beck, Munich 2011, ISBN 978-3-406-58202-8 , pp. 1455-1467.
  6. ↑ § 5 What applies if the insured person kills himself? . In: General conditions for term life insurance  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. (PDF file; 304 kB)@1@ 2Template: Dead Link / www.gdv.de   , GDV of October 25, 2012.
  7. ↑ Attila Fenyves; Martin Schauer; Franz Kronsteiner: Commentary on the amendments to the VersVG: Amendments to the Insurance Contract Act 1992, 1994 and 1996 . Springer, Vienna 1998, ISBN 3-211-83189-4 , p. 236f.
  8. ↑ Extent of insurance coverage , § 3, insurance conditions for life and death insurance (2008) ( Memento of the original of August 22, 2012 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. of the Association of Insurance Companies Austria (VVO), p. 4. @1@ 2Template: Webachiv / IABot / www.vvo.at
  9. ↑ M. Humbert, HP Hartmann: Life insurance and suicide: Swiss comparative study of individuals with individual capital insurance and the general population . In: Journal for the entire insurance science . Vol. 68, No. 3 (September 1979), ISSN  0044-2585 , pp. 399-407.
  10. ↑ Renat I. Bekkin: Islamic Insurance: National Features and legal regulation . In: Arab Law Quarterly , Vol. 21, No. 2 (2007), pp. 109-134. (Specifically on suicide clauses in the Takaful: p. 117.)
  11. ^ Anne-Julia Zwierlein : Shipwrecks in the City: Commercial Risk as Romance in the Early Modern City Comedy . In: D. Mehl, A. Zwierlein (Eds.): Plotting early modern London . Ashgate, Aldershot 2004, ISBN 0-7546-4097-3 , pp. 75-76 . (The name of the insured person is given differently in the literature as William / Williams or Gybbon / Gybbons.)
  12. ^ A b c Robin Pearson: Moral Hazard and the Assessment of Insurance Risk in Eighteenth- and Early-Nineteenth-Century Britain . In: The Business History Review . Vol. 76, No. 1 (Spring 2002), pp. 1-35, doi : 10.2307 / 4127750 .
  13. ^ Victor Bailey: This Rash Act: Suicide Across the Life Cycle in the Victorian City . Stanford University Press, Stanford 1998, ISBN 0-8047-3123-3 , pp. 67-69 .
  14. ^ The Historical Society of Pennsylvania (ed.): Collection 3101: Presbyterian Ministers' Fund (PDF; 228 kB) . Philadelphia 2008, pp. 2-5. (Background note)
  15. ^ A b Sharon Ann Murphy: Investing in Life . Baltimore 2010, p. 92 .
  16. ^ Proposals of the Massachusetts Hospital Life Insurance Company, to Make Insurance on Lives . J. Loring, 1823, OCLC 62622453 , p. 44. (No. 5, Policy of Insurance)