Suicide and Life Insurance in Maryland

The fine print of an insurance contract in Maryland will likely say that suicide is an excluded act to collect on a life insurance policy. But this is wrong.

Maryland law has something called an incontestability clause. This means that a life insurance policy must pay out on a certain types of claims, including suicide, even if they are excluded under the policy if the policy has been in effect for two years.  

Conversely, if it is clear that the death was caused by suicide and the policy is less than two years old, the beneficiaries cannot collect on the life insurance policy under Maryland law. 

Burden of Proof in Suicide Cases

If the suicide is within 2 years of the initiation of the life insurance policy,  the insurance company has the burden of proving at trial that the death was the result of suicide. This is a difficult hoop for insurance companies to climb in some cases. Maryland law presumes that the death was caused by an accident or by natural causes. So in spite of what some insurance companies may think, the burden is on the insurance company to provide the cause of death was a suicide. 

Fister v. Allstate

This Maryland appellate case involves the question of life insurance coverage in the event of a suicide. In September of 1996, the decedent made the regrettable decision that she wished to die. Before her death, she left several messages with friends and family, underscoring her intention to end her life. The decedent had incurred a great deal of debt 1996, and a criminal investigation was ongoing regarding her business activities.

The decedent attempted, on several occasions, to find someone to kill her. A former boyfriend shot her so she would appear to have been murdered. They drove to a site on Baldwin Road in Monrovia, Maryland. After killing the decedent, the friend was arrested and charged with murder. He pled guilty to voluntary manslaughter, receiving an agreed upon sentence of five years imprisonment.

The decedent purchased five different life insurance policies from Allstate. All of the policies had a provision that if the insured dies by suicide within 2 years from the start date of the contract, Allstate would only pay a refund of the payments made. Naturally, Allstate did what most insurance companies do when given the sliver of an opportunity to do so and denied coverage, citing Maryland Insurance Code Annotated Section 16-215 (2004).

On appeal, the Maryland Court of Appeals, in an opinion written by Judge Lynn Battaglia, ruled that the term suicide, as used in Section 16-215, precluded an interpretation of the word “suicide” to include a death that occurred as a result of the conduct of another person. The court found that the clear and unambiguous definition of the term in the Maryland’s Assisted Suicide Act was to intentionally take one's own life. Accordingly, the decedent's death was found not to be a suicide and the beneficiaries were entitled to recover the proceeds of the five life insurance policies.

Allstate argued that the “slayer's rule” precludes the petitioners from recovering the death benefits. Under the slayer's rule, embodied in Maryland common law, a beneficiary of a life insurance policy may not recover under the policy if he/she is responsible for bringing about the death of the insured. Accordingly, Allstate rather creatively argued the decedent was a beneficiary under the policy. But the court ruled that the slayer rule was intended to preclude a slayer from benefiting from the killing of another. None of the beneficiaries was responsible for decedent's death and neither participated in decedent's death. Accordingly, because the decedent was not the beneficiary of her own life insurance policies, her death was not a suicide.

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