A Deadly Conundrum

“California dad charged with insurance fraud after he drove off cliff, killing autistic sons“

Now, we’ve discussed before the fact that one may not profit from a crime:

“In this story … we learn about Joaquin Shadow Rams, who seems to have a habit of buying, and then collecting on, life insurance policies for his intended victims, including (allegedly) his mother and his girlfriend.”

And of course there have been others. In all of the related posts I can find, though, all save one have been about straightforward and underwritten (term, whole or universal life) plans. But this one’s different, and I’d like to talk about that difference.

“Regular” (aka “ordinary”) life plans like term and whole life are generally underwritten (although there are guaranteed issue versions which impose waiting periods). But “accidental death” plans pay out only if the death is due to an non-purposeful injury (well, almost always). And the key to these plans is that they are generally not underwritten.

[ed: As an aside, one wonders if there was a cultural motive involved here in addition to the financial one]

In the case at hand, the facts seem pretty straightforward as to what happened. What’s interesting to me is why the father chose an Accident Only plan instead of a term or even “Jumping Juvenile” one. And it seems to me that the answer is fairly obvious: the lack of underwriting makes it an easier “buy,” and the fact that it’s Accident only makes it a lot cheaper.

It’s also worth noting this little tidbit:

“[T]wo years and 12 days earlier, Elmezayen bought the last of his insurance policies, which were purchased to cover his family in the event any of them accidentally died.”

One presumes that this was to avoid triggering the “Contestability Clause,” but I’m not seeing where that would apply to an Accident Only plan. After all, that clause is to protect the carrier from misstatements of health, age or sex; I’m not aware of any app that asks “Are you planning to murder your spouse/children any time soon?“

This is obviously a very sad case, but also a very strange one.