More on Life Insurance
More on Life Insurance
If your beneficiary plans on murdering you to get life insurance money, slayer statutes prevent them from receiving any of the funds.
Published November 23, 2020
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Life insurance policies have been the plot point of countless thrillers and true crime shows. We’ve all seen the classic whodunnit with a $1 million life insurance payout as the motive — and the beneficiary as the prime suspect.
But real life isn’t a true crime show. Even a hint of suspicion that your beneficiary killed you can make them ineligible for receiving the life insurance payout. Hopefully, that’s enough to deter them from making such a terrible decision, but if you’re still feeling paranoid, we’re here to help.
Even the suspicion of murder can disqualify your beneficiary from receiving the life insurance death benefit or any other part of your estate due to the slayer statute
Each state has its own version of a slayer statute
You can change your beneficiaries at any time if the need arises
Slayer statutes prohibit anyone who murdered (or conspires to murder) the policyholder to receive their estate and notably, the life insurance payout. A conviction isn’t necessary for this to take effect: if there is even reasonable doubt, insurers can refuse to pay out the death benefit. Even if the suspect is acquitted in the trial, they can still be prohibited from getting the life insurance money.
State laws differ around the specifics of their slayer statutes. For example, in Texas, the slayer rule isn’t as broad as in other states — but a beneficiary still can’t inherit the life insurance money if they killed the policyholder. Some states have even added stipulations to this statute and won’t pay the death benefit if there is the slightest suspicion that they’ve “financially exploited” the policyholder or abused them. If your beneficiary is ineligible to receive the death benefit because they wanted to kill you, the policy doesn’t lapse. Instead, it is paid out to your other primary beneficiaries or contingent beneficiaries.
If someone in your life takes out a life insurance policy on you, there isn’t an immediate cause for alarm. Hopefully, incorporating a life insurance policy into your financial strategy is a conversation you’ve already had.
There are a lot of legitimate reasons why someone would take out a life insurance policy on you — if your death would have negative financial consequences for them, for example. Here are some reasons that someone would take out a policy on you:
If you own a business with someone, it’s reasonable that they might want to take out a life insurance policy on you. Whether it’s just the two of you, or you both play a vital role in a small-but-growing company, your death would probably affect the company. Your business partner would take out a key person insurance policy on you to ensure that there’s enough cash to cover a transition period as the business adjusts to your death.
If your parents or a spouse co-signed your student loans, a life insurance policy that lists you as the insured would protect them from being liable for your loans if you died prematurely. While federal student loans are generally canceled if the borrower dies, private student loan debt is transferred to the co-signers on the loan. Life insurance would protect your co-signer from taking on hundreds of thousands of dollars in debt.
Do you provide care for family members, such as elderly parents? A sibling who shares your responsibilities or the individual you care for may need to take out a policy on you to replace your support — whether it be financial support or at-home-care. The life insurance death benefit would help shoulder the burden of your loss.
One of the most common reasons someone would need to take a life insurance policy out on you is because you share finances with them. If your partner depends on you for even a portion of expenses, like mortgage payments or bills, then securing a policy that would pay out if you died can protect them from financial suffering.
Income earners aren’t the only people who need coverage. Stay-at-home parents provide vital services that would need to be replaced, too.
For someone to take out a life insurance policy on you, you’ll have to sign the policy documents. No one can take out a life insurance policy on you without your knowledge without committing life insurance fraud. The death benefit should be calculated based on your life insurance needs, which will include your debts, expenses, and future plans.
Did you have more than one beneficiary listed on your life insurance policy? If your other beneficiaries mysteriously die off, it could serve as an early warning sign. Setting up multiple primary beneficiaries is easy as listing them in your policy and denoting what percent of the death benefit each beneficiary gets. Or they can get an equal stake in your death; four beneficiaries get 25% of the death benefit each. If one dies, they each get 33%, and so on, until only one remains. You can also set up contingent beneficiaries, who receive the death benefit if none of your primary beneficiaries are alive to accept it.
To make sure that your family is adequately protected, some people set up the death benefit to be per stirpes vs per capita, which protects your beneficiaries’ heirs if they die and cannot accept the death benefit.
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Think your life insurance beneficiary is going to murder you? First of all, you should have a little talk with them about the slayer statute.
The good news is you can update your policy at any time to change or remove your beneficiaries. In fact, it’s a good idea to sit down every year or two and make sure your policy matches your current needs. Alongside this, you should update your policy with every big life change, such as getting married, having kids, or if you’ve decided to remove a former beneficiary from your policy for whatever reason, such as if you're going through a divorce. It’s as simple as updating your beneficiary designation in your online portal or calling your insurer.
Sure, a life insurance policy might make you feel like there’s a target on your back. But for most families, it’s a critical piece of financial protection, and well worth the risk.
The slayer statute prohibits your beneficiary from getting the death benefit if they are suspected of murdering (or trying to murder) you.
If your beneficiary kills you, the life insurance payout then goes to your other primary beneficiaries or your contingent beneficiaries.
Each state in the U.S. has its own version of the slayer statute. Some are broad and permit insanity pleas, while others are more intricate and won’t pay out if there are even signs of past abuse.
Nupur Gambhir is a life insurance editor at Policygenius in New York City. She has researched and written extensively about life insurance since 2019, with specialties in life insurance companies, policy types, and end-of-life planning. Her writing on insurance and finance has appeared on MSN, The Financial Gym, and end-of-life planning service Cake. Previously, she worked in marketing and business development for travel and tech.
Nupur has a B.A. in Economics from Ohio State University.