Cedric E. Stephens, Contributor

Question: My son was shot and killed about a year and a half ago. The incident occurred on North Street. He was shot by unknown assailants. I went and identified his body. A post-mortem was done at a later date. The death certificate stated that he died from multiple gunshot wounds.

He had a life-insurance policy which had a basic sum insured of $700,000. There was also an amount of $500,000 for accidental death and dismemberment (A D& D).

I took the insurance policy, along with his birth certificate and burial order, to the insurance company. They gave me a letter to take to the police. I collected their reply and took it to the insurer. They paid $700,000, along with an amount which was invested. They told me that they were awaiting further details from the police before paying the amount for AD&D. I have heard nothing from since then. Can you please help me?

- KB, Dallas Castle P.O., St Andrew.

Answer: Yours is the first of three messages that I received after writing an article that was headlined "Is death by murder accidental to the victim?"

The second and third were SMS or text messages. The writer, who I will call 'E', identified herself as the mother of the victim. She does not have access to a computer. She composed and sent me two detailed messages. In them, she alleged that he was shot and killed by the police earlier this year. She is having difficulties collecting insurance money and had to get a loan in order to pay for his burial.

Cases like yours and E's show the importance of the role that insurance and insurers play in the society. They also highlight how gun violence affects in a very profound way the families of those who are killed or injured.

I have decided to use this article to try to clear up some general misconceptions about insurance, and to answer the specific question that you posed.

Life-insurance companies - in spite of all the hype - are formed to create wealth for their shareholders.

The words in their values and mission statements are built on this foundation.

No feelings

They show no feelings when it comes to handling the claim of a former customer.

Their actions are guided by what their contracts say - nothing more, nothing less.

When a customer dies, payment of the death benefit is not automatic.

The dependents of the deceased will have to show that the death occurred in accordance with the terms of the contract.

Payment is made only after this has been done, no matter the cause of death, or how untimely it was.

With those general remarks now out of the way, I will now turn to your question.

I sent a copy of your mail to the president and chief executive officer of the company that insured your son. Two days later, he sent me a report from his customer-service manager which reads:

"We thank you for your correspondence dated July 29, 2009, ... and take this opportunity to thank you for bringing this matter to our attention.

"... A review was conducted regarding the matter to verify the reason for the non-payment of the accidental death and dismemberment benefit on the deceased ... . Our investigations reveal an unfortunate delay, which we are currently in the process of addressing.

"... In processing a claim of this nature, unless there is compelling evidence to substantiate that death was accidental, the basic sum insured is paid first so as not to delay total payment. In this case, the police report received was not conclusive and indicated that no motive had been established for the killing, and investigations were continuing.

"Included in our contractual agreement under the accidental death and dismemberment provision is the following exception: No benefit will be payable under this provision if the death or injury of the life insured results, either directly or indirectly, from: the committing, attempting, or provoking of an assault or criminal offence.

"Having not received conclusive evidence surrounding the death from the police, and as you can further appreciate, our uncertainties in the matter, the AD&D portion of the claim was withheld pending this report. Inadvertently, however, no follow-up took place, and for this, we offer our unflinching apology.

"We take full responsibility for our tardiness in following up with the police but hasten to reassure you that this is not a true reflection of how we conduct our operations. This was an unfortunate but genuine oversight which, I can assure you, will never recur as we strive to assist our clients and their families in their hour of bereavement.

"We have now written to the police and await their response to complete the processing of this claim. We take this opportunity to thank you once again for bringing this matter to our attention and assure you that we will follow up (with the mother of the deceased) regarding this claim."

This company has clearly shown that it understands its role in Jamaican society. Its response demonstrates that it knows how to handle complaints and, more important, seeks to assist clients and their dependents. Bravo!

Perhaps the response also explains why the company continues to record profit for its shareholders in a difficult macro-economic climate.

Finally, I suggest that you follow them up in the next two to three weeks.

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