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jazmina88's avatar

What affects the dismissal of life insurance payouts?

Asked by jazmina88 (11647points) January 13th, 2011

If your spouse goes crazy to kill you for insurance money, do they still pay out the funds? to someone else?

What if you smoke medical marijuana? Could that cause issues?

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5 Answers

jazmina88's avatar

Dont worry…I’m not packin a pistol, just have a differently abled great nephew I need to take care of.

Arbornaut's avatar

? Im guessing if the spouse does a good job, then they would receive the pay out.
But wait.. you said crazy. Crazies don’t usually do a good job.
Killing spouse? Smoking weed and a nephew?
Im confused.

poisonedantidote's avatar

The way I think it works, is, Insurance companies main source of income is dismissed payouts. So really, It will depend on your particular insurance company and how they operate, but for the most part, you can expect them to try to get away without paying, any time they have anything they think could fly in a court room.

jazmina88's avatar

I have a 12 yr old great nephew who cant speak or walk.
I smoke medicinally.

I dont know nothing about crazy spouses…..That why I stay single.

But I want to make sure the great nephew is taken care of.

IchtheosaurusRex's avatar

Here’s how it works. In the case of a beneficiary killing the insured for the money, the proceeds will be paid to the contingent beneficiary or the deceased’s estate. That’s in most states. The insurance company doesn’t get to keep the proceeds.

Smoking medical pot is a non-issue, unless it constitutes what’s called a “material misrepresentation.” In other words, if smoking pot would disqualify you from being insurable, and you die within the policy’s provisional period, then the company won’t pay the claim. They will, however, return the premiums under certain circumstances. Smoking pot, medical or otherwise, after the policy is issued won’t make any difference in the payout, even if it contributes to the cause of death.

Most life policies have a two-year contestability period. This means that the issuing company can cancel your policy up to two years after they sold it to you, if they discover a material misrepresentation on your application. An example of a material representation is telling them you don’t smoke when in fact you do. An example of a non-material misrepresentation is giving a wrong phone number, even if it’s intentional. There is also a two-year suicide provision. This means that your beneficiary still gets the proceeds if you off yourself after 2 years, which is something a lot of people don’t know.

Once a policy is out of the contestability period, they are bound to pay the death benefit even if material misrepresentation is discovered afterward. For example, you could knowingly have cancer, and not tell them about it when you apply. If you live for more than two years, they will still pay. However, they usually want a medical exam with the application before they’ll issue the policy just to prevent this kind of thing.

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