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Intra-Operative Death - Is it covered by your accidental death insurance policy?

| August 20, 2015
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The debate continues when a patient dies on the operating table over whether it was an accident or not. This is highlighted by a Forbes article that reports of a Trudy Barnes, a 31 year old that died at a Dallas area hospital in surgery in 2007 that was to correct her curvature of the spine. The anesthesiologist inserted a catheter too far into her chest, puncturing a vein and eventually causing death. AIG fought the accidental death claim filed by the husband, but eventually lost.

What is the purpose of “Accident Insurance”? Why do we as consumers buy an accidental insurance policy? Why does often the “accidental” death occurrence give a higher payout of benefit to the beneficiary than just “death” in a life insurance policy? Once you answer these questions you can only come to the same conclusion Judge Chin did in the Forbes article story referenced above, that death that occurs in the operating room during surgery due to an incident that was “unintentional, unexpected, unusual and unforeseen” is an accident and therefore would qualify for the accidental insurance payout.

Some physicians may feel that such a categorization as “accidental” regarding what occurred in the operating room in this incident fans the fire of malpractice lawyers. After all, isn’t morbidity the results of disease and essentially the human condition? 

First off, I think an understanding of accidental death insurance is in order. Secondly, the dire need for malpractice tort reform in most states, and the fact that a doctor can be sued for ridiculous amounts of money for making a mistake during surgery does not change the fact that accidents can happen.

Let us not forget however that an insurance policy is just a contract, and that insurance companies, while happy to cut checks all day long for “small” claims (under $10k? $25k?), will analyze larger claims. Insurance companies have a mandate from their shareholders to be profitable and “accidental death” is usually strictly defined in most policies. The sad recent case of Whitney Houston’s death, ruled accidental by the coroner, would be denied an accidental death payment by most insurance companies contractually because of the toxicology report finding that “cocaine and metabolites were identified and were contributory to the death”. In addition, death by a disease is typically not covered under an accidently death policy. Trudy Barnes, in the above-mentioned Forbe’s article, had an accidental death policy with a $149,000 benefit. She died on the operating table due to an unintentional occurrence. I dare say that if her accidental death policy was for say, $25,000, that the insurance company would have paid the benefit without even a murmur. After all, you cannot hire a bad faith attorney from a major law firm to defend you for less than that. Does the amount of the claim change the fact that it was an accident?

Life puts all of us at times in situations that we would rather not be. This fact should not in and of itself preempt the validity of an accidental death claim. While Trudy signed the waivers for the operation to fix her curvature of the spine, I do not believe that her desire to seek medical help for her condition disqualifies her accidental death policy and takes her insurance company off the hook. After all, isn’t that why we buy an accidental death policy, because “life happens”? If an individual was involved in a fatal car accident due to snowy conditions that caused his/her car to careen off the side of a cliff, shouldn’t an insurance company pay the accidental death claim? Alternatively, would the insurance company deny the claim with the defense that the person should not have been driving because walking would have been safer or that the person should have obtained better driving skills?

Accidental life insurance has a place in the financial plan of individuals that desire to protect their families from the financial hardships that can occur due to an unexpected death. Accidents (unintentional injuries) according to the CDC is the 5th leading cause of death in the United States, right behind Heart disease, Cancer, Chronic lower respiratory diseases and Stroke, with 118,021 accidental deaths occurring in 2009. By age group, accidents are the leading cause of death for the population aged 1 -44 years. As a financial planner I see death as the risk that I must consider for my clients, and not necessarily whether it was caused by an accident or not. The risk of premature death is covered by adequate life insurance; clients may prefer to pay an added premium if it is reasonable in order for their beneficiary to receive an additional benefit amount or a multiplier if the death was an accident. Insurance companies assess all premiums based on actuarial and other factors. While accidents is the leading cause of all death in those under 44 years of age, and the fifth leading cause of all deaths, it is only about 5% of all deaths in the US. Accidental death is likewise a smaller risk for an insurance company to consider and therefore the premium for this added coverage is relatively inexpensive.

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