Voluntary High Risk Behavior Can Affect Your Right to Benefits Under an AD&D Policy

Many employers in Chicago and the Midwest provide employees with various types of insurance in the benefits package, including life insurance and accidental death and dismemberment insurance (“AD&D”). Life insurance may be a standalone policy, but often AD&D is a portion of a larger policy that includes life insurance and AD&D. According to the Center for Disease Control, in 2007, unintentional accidental deaths were the fifth leading cause of death in the United States. While many people seem to know how their beneficiaries would recover under a life insurance policy, many employees and executives wonder what triggers benefits under an AD&D policy, and what can jeopardize those benefits.

Generally, AD&D policies will pay benefits in addition to life insurance if the death or dismemberment (often called the “loss”) is the result of an accident taking place within a particular amount of time prior to the “loss.” Deaths resulting from illness, suicide, or natural causes are generally not covered. In addition, most policies exempt from coverage any loss caused or contributed to by intentionally self-inflicted injuries. However, the language of exemption can vary from policy to policy. The question, though, is what exactly is a self-inflicted injury? Would it encompass voluntary engagement in high-risk behavior?

A participant of an insured under such a policy recently had to battle over this definition. In Martin v. Hartford Life & Accident Insurance Co., 2011 U.S. Dist. LEXIS 26920 (W.D.N.Y. Mar. 16, 2011), the claimant claimed benefits from Hartford due to the death of her husband, the insured. The insured had both life insurance and an AD&D policy with Hartford. Hartford paid the benefits under the life insurance policy, but denied the claim under the AD&D policy. It appeared clear the death was accidental, but the parties disagreed as to whether the death was the result of an “intentionally self-inflicted injury.” Investigators determined that the cause of the insured’s death was electrocution resulting from a self-administered electric shock with a homemade wire device apparently for recreational purposes.

Claimant’s counsel argued the policy’s exclusion did not apply, analogizing this case to Critchlow v. First Unum Life Insurance Co. of America, 378 F.3d 246 (2d Cir. 2003), which held a rock climber’s death from accidental fall was the result of an intentionally self-inflicted injury. The court in Martin, however, upheld the insurer’s denial of benefits, opining that the electric shocks were in fact an injury, and the injury was intentionally self-inflicted. The distinction, therefore, is between intentionally engaging in a behavior that brings risk of injury, and intentionally inflicting some injury (even if the injury is not intended to cause death). To many, this may appear to be splitting hairs, but such is the world of ERISA. If you have a question about coverage under a group life insurance or AD&D policy, call a seasoned ERISA lawyer.