Life Insurance suicide exclusions in Colorado
Colorado has a statute which says: “The suicide of a policyholder after the first policy year of any life insurance policy issued by any life insurance company doing business in this state shall not be a defense against the payment of a life insurance policy, whether said suicide was voluntary or involuntary, and whether said policyholder was sane or insane.”
In a new case the Colorado Supreme Court ruled that under certain circumstances, even if one kills oneself within less than one year after purchasing a life insurance policy, the insurance might have to pay. The case is Renfandt v. New York Life.
In late November 2014, Mark Renfandt applied for a life insurance policy with New York Life Insurance Company, naming his new wife as the beneficiary. New York Life issued a temporary coverage agreement that insured Mark’s life while the insurer considered his application. The agreement contained a provision excluding coverage for “suicide or intentionally self-inflicted injury … while sane or insane.” One month later, on December 22, 2014, Mark died from a self-inflicted gunshot wound while appearing to be in a “zombie-like” state from a combination of prescription medication, alcohol, and marijuana. The coroner’s death certificate listed the manner of Mark’s death as “suicide.” A toxicology report showed that Mark’s blood alcohol concentration was very high at 0.325%. The report contained an annotation stating, “BAC: coma, alcohol poisoning.” The report also showed that Mark had clonazepam and marijuana in his system. When Mark’s wife tried to collect life insurance benefits under the temporary coverage agreement issued by New York Life Insurance Company, the insurer denied the claim, citing a provision in the agreement that excluded coverage for “suicide … while sane or insane.”
The Colorado Supreme Court took up the question, “Under Colorado law, does a life insurance policy’s exclusion for “suicide, sane or insane” exclude coverage (1) for all acts of self-destruction without regard to the insured’s intent or understanding of the nature and consequences of his/her actions or (2) for only acts of self-destruction committed when the insured intends to take his/her own life?” The Court ruled that in Colorado, a policy exclusion for “suicide … while sane or insane” still requires an insurer to show that the insured’s death was a “suicide.” In other words, an insurer must show that the decedent, while sane or insane, committed an act of self-destruction with the intent to kill himself. The burden of proof in on the insurance company to show intent to kill oneself.