Life Insurance-Related Murder Author:    Posted under: Life InsuranceLife Insurance questions answered

Wikipedia defines life insurance to be “a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual’s or individuals’ death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount (at regular intervals or in lump sums). There may be designs in some countries where bills and death expenses plus catering for after funeral expenses should be included in Policy Premium. In the United States, the predominant form simply specifies a lump sum to be paid on the insured’s demise.”

Life policies are the legal contracts with regards to life insurance and the conditions of the contract has limitations of insured events. Detailed, precise exclusions are often written into the agreement to limit the legal responsibility of the insurer. Suicide, fraud, war, riot and civil commotion are just such exclusions.

It is human instinct to try and protect our loved ones and we strive to do so even in death. That is why life insurance policies came to existence. But life insurance becomes ominous in that the death of the insured guarantees that the beneficiary stands to gain financially from it. And while many think that it only happens in the movies, case after case of murder in order to claim life insurance benefits can easily be found.

Probably the most well-known case in recent times is that of Olga Rutterschmidt, 75 and Helen Golay, 77, who were both found guilty of killing two homeless men after setting them up with insurance policies.

The victims, Kenneth McDavid and Paul Vados, were first befriended by Rutterschmidt and Golay. McDavid and Vados were homeless men living in Los Angeles prior to meeting the two women before they were put up in apartments. Life insurance applications were then forged and, to avoid raising suspicion, the women waited before killing each of the men.

With each murder, the homeless men were found dead in alleys after being drugged and run over. Police suspicion escalated as similarities with both cases emerged.

A Missouri woman was sent to prison after being convicted of hiring two men to kill her husband so she could collect life insurance benefits in 2010.

In Indiana, a vacuum cleaner salesman was shot and killed in 2003. His wife, also the beneficiary of two life insurance policies totaling $1 million, was convicted in connection with his death in 2009.

In April 2010, a Washington state jury found 40 year old Joel Zellmer guilty of second-degree murder in the drowning of 3 year old Ashley McLellan, his step-daughter in 2003. Prosecutors have determined in April that it was in an effort to collect on a $200,000 policy which was taken out three months prior to the murder.

Some state courts have established that there are times when an insurer needs to be aware when a person named as the beneficiary had no “insurable interest” in the insured. 42 out of the 50 states have specific “slayer statutes” that prevent life insurance beneficiaries from receiving payouts if they “intentionally caused” the insured’s death. Even in cases that the beneficiary wasn’t convicted of murder or manslaughter, but was involved in the insured’s death (such as hiring someone else to kill the victim), some states allow the court prevent payouts to the beneficiary from happening.

“Though life insurance policies try to get around the problem of incentive to murder by requiring an insurable interest in the life of the insured (that the beneficiary have an interest in the continuing life of the insured), it is easier to state that in a statute than to insure that it is true in real life.” – Prof. Bill Long


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