Question: My son was shot near Cross Roads about two years ago. He died almost one month later in the Kingston Public Hospital as a result of his injuries. After the post-mortem was carried out we sent a copy of the death certificate and police report to two life insurers. The group life insurance paid the death benefit in addition to an amount for accidental death (AD&D). The other company paid only the sum insured, $400,000, under the life policy. They say that they are waiting on "an update of the investigations conducted into his murder" from the police. This doesn't make sense to me. Can you please help?

- M.H., St Catherine

Answer: The actions of the second insurers do not make sense. After I consulted my very modest insurance library, reference books of a professional body of which I am a member and a small sample of the vast resources of the Worldwide Web, I am convinced that neither you nor me are idiots!

What Is AD&D Insurance?

Accidental death and dismemberment insurance is also called AD&D. The term describes a policy that pays benefits if the cause of death or injury is due to an accident. Fractional amounts of the sum insured are paid if the insured person loses a limb, fingers or toes or loses his sight.

Payments are also made in the event of paralysis. In the case of accidental death, a capital sum is paid. This is in addition to any life insurance that is held. The sum insured for AD&D is usually a multiple of the amount covered by life insurance or 'x' times annual salary. Death which occurs as the result of illness, suicide, or natural causes is not covered.

Is This a Stalling Game?

The second edition of Carol Bennett's Dictionary of Insurance provides answers to two important questions. The first is, in the context of the death of your son, was there an accident? An accident is defined as: "A sudden, unplanned and unlooked for mishap or untoward event, (that is) not under the control of the insured, resulting in injury ... There has to be an element of fortuity (or chance)."

The second question arises from the first. What his death accidental? The phrase accidental death is said to mean, according to my same source, "death caused by violent, accidental, external and visible means which shall solely and independently of any other cause result in death."

Even though I have not seen your son's policy, examined his death certificate or the police report, I strongly feel, based on the information that you gave me, that the second insurer has been playing a stalling game for the last two years.

I sent an email to the company's head honcho. I told him that there was "absolutely no legal or technical justification for your company to be withholding payment or to be seeking additional information from the police."

approved

I also told him that their main competitor had settled the claims made against them without any hassles. Two days later, the manager of their customer service department replied to say that "this claim has been approved for payment". She offered no reasons why management had not authorised the settlement of claim before now or whether interest would be paid on the AD&D benefit.

Given the harm which has been done to you and your family during a period of great trauma and also to the company's image and brand by the persons who handled the claims, I half expected to hear about internal disciplinary actions. Alas, not even an apology was offered.

This is in spite of the gravity of the error that was committed and the period it covered. In a well-run, customer-centric organisation, the CEO would have understood the implications of the problem I had brought to his attention.

He would not have delegated the responsibility of preparing the response to my email to an underling who, despite her title, knows as much about customer service as the others who handled the AD&D claim!

Anyway, all's well that ends well. The company has since paid the AD&D claim.

Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. Email: aegis@cwjamaica.com or send text (SMS) message to 812-7233.