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Author Topic: No insurance payments for 9/11 victims
snopes
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Comment: Only 2 Life Insurance Companies paid out their death claims to
the victims of September 11th; the rest used either War or Catastrophe
exclusions to avoid paying. Fact or fiction?

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diddy
Markdown, the Herald Angels Sing


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quote:
Originally posted by snopes:
Comment: Only 2 Life Insurance Companies paid out their death claims to
the victims of September 11th; the rest used either War or Catastrophe
exclusions to avoid paying. Fact or fiction?

I would say doubtful since their was no declaration of war at that time (and I dont think one has been delared yet). Futhermore what is a "catastrophe exclusion"? My mind says that a catastrophe is why you have insurance in the first place.

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BeachLife
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I'm sure it's not true because there was a lot of stink about the government payouts be less for people with life insurance. Regardless, I'm not worried about. The surviving family members of the victoms of 9/11 were all made millionaries by the payouts. I can't see getting upset about whether they did or did not get insurance payouts on top of that.

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Lainie
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quote:
Originally posted by diddy:
Futhermore what is a "catastrophe exclusion"? My mind says that a catastrophe is why you have insurance in the first place.

Some property insurance excludes "acts of God" -- but I've never heard of a life insurance policy excluding it.

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chillas
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For insurance purposes, a catastrophe is defined as a large scale event that affects a geographical location - hurricane, tornado, earthquake, etc. As Lainie points out, property insurance frequently excludes those. There are exceptions and alternatives, such as flood insurance - flood damage is usually excluded from property insurance, but specific flood insurance can (and sometimes is required) be purchased.

This is different from non-catastrophe events, such as auto accident, fire, water damage from a burst pipe, etc.

But, also like Lainie, I've never heard of catastrophe exclusions for life insurance.

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Arriah
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What about 'terrorist acts' though? I know I've seen that exclusion in some policy of mine although I can't remember if I saw that before 2001.

One that always cracked me up though. I bought a way too expensive bed when I was 18 and had it financed so it had to have insurance. The policy specifically didn't pay out if the bed was damaged or destroyed due to a thermo-nuclear blast. I decided that if that destroyed my bed, collecting on insurance was the least of my problems.

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Lainie
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quote:
Originally posted by Arriah:
What about 'terrorist acts' though? I know I've seen that exclusion in some policy of mine although I can't remember if I saw that before 2001.

But was it a life insurance policy, or a property damage policy? The only exclusions I'm aware of in life insurance policies are for suicide. With some policies, the suicide exclusion expires after a certain period.

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Hero_Mike
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Would this fall under the exemption for "acts of war - declared or undeclared"? That's a standard disclaimer in life insurance.

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Arriah
The First USA Noel


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quote:
Originally posted by Lainie:
quote:
Originally posted by Arriah:
What about 'terrorist acts' though? I know I've seen that exclusion in some policy of mine although I can't remember if I saw that before 2001.

But was it a life insurance policy, or a property damage policy? The only exclusions I'm aware of in life insurance policies are for suicide. With some policies, the suicide exclusion expires after a certain period.
I honestly can't remember where it was, I just remember seeing it. It could've been that I saw it in some article talking about how insurance policies have changed after 9/11, which would make a lot of sense.

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GenYus
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quote:
Originally posted by Lainie:
But was it a life insurance policy, or a property damage policy? The only exclusions I'm aware of in life insurance policies are for suicide. With some policies, the suicide exclusion expires after a certain period.

I've also seen exclusions for "dangerous activities". I think this was things like skydiving or bungee-jumping.

quote:
Originally posted by Hero_Mike:
Would this fall under the exemption for "acts of war - declared or undeclared"? That's a standard disclaimer in life insurance.

Is that acts of war where the insured is a soldier/combatent or just a collateral victim?

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Towknie
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I was dabbling in insurance at the time, and asked a VP at MetLife if 9/11 counted under the "Acts of War" exclusion. He told me that technically it did, but the industry as a whole got together and decided it would be just plain wrong to deny payment on claims.

My guess is that the cost of lost policies in the future from bad PR outweighed the cost of paying off the death benefits. Insurance companies do absolutely nothing out of sheer altruism.

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Hero_Mike
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quote:
Originally posted by GenYus:
quote:
Originally posted by Hero_Mike:
Would this fall under the exemption for "acts of war - declared or undeclared"? That's a standard disclaimer in life insurance.

Is that acts of war where the insured is a soldier/combatent or just a collateral victim?
Good question. If civil war broke out in, say, Venezuela, while you were there on vacation, and died as a collateral victim, would this exclusion apply?

What if you had existing insurance and it was unaware of your new job as a news photographer in Iraq, and you died as a collateral victim? If the insurance was aware of your occupation, there could be an automatic exclusion for death in the line of your employment, but if it is pre-existing insurance with no such clause at the time it was accepted, then the "acts of war" clause would still probably apply.

I recently applied for life insurance - the insurance company asked all sorts of questions about my work and had an exclusion for my death being caused "directly or indirectly by my visit to Country X". I had indeed been to Country X before, and may go there again. I also may go there on vacation, but the words "directly or indirectly" seem too vague, and if my insurance company were to deny the claim if, say, I die of cancer, the burden would then be on my estate to sue the insurance company, at its own expense, and force them to prove that I did indeed get terminal cancer 40 years after a brief visit to a third-world country where carcinogenic chemicals are in widespread, unregulated use. It seemed like a blanket "back door" to get out of paying the claim.

I rejected the policy on this basis, and the insurance company reconsidered and removed the clause, because it seems that they'd rather have my business after all.

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"The fate of *billions* depends on you! Hahahahaha....sorry." Lord Raiden - Mortal Kombat

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chillas
Coventry Mall Carol


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Individual and group life insurance as well as accidental death & dismemberment policies usually do not have act of war exclusions. Some may, but that is not typical. Act of war exclusions usually apply to property (home, auto, commercial, etc.).

Immediately (less than a week) after 9/11, the U.S. House Financial Services Committee sent a letter to the National Association of Insurance Commissioners encouraging them to not invoke act of war or terrorism exlusions on life insurance policies where they did exist.

It's also worth noting that, in the rare cases terrorism exclusions do exist, they most often apply specifically to someone travelling to a location outside of the US where terrorist attacks are more common.

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Come on, come on - and the world's a little brighter


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Lainie
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quote:
Originally posted by GenYus:
quote:
Originally posted by Lainie:
But was it a life insurance policy, or a property damage policy? The only exclusions I'm aware of in life insurance policies are for suicide. With some policies, the suicide exclusion expires after a certain period.

I've also seen exclusions for "dangerous activities". I think this was things like skydiving or bungee-jumping.
I've also heard of rates being raised for people with dangerous hobbies -- scuba diving was the example my agent gave.

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stalker
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quote:
Originally posted by Lainie:
With some policies, the suicide exclusion expires after a certain period.

That's brilliant. Is that so they're sure you're not doing it on a whim?

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