By Choi Kyong-ae
The Seoul High Court has ruled that life insurers are not obliged to pay insurance money in the case of suicide when it comes to added on special contract insurance covering accidents, according to local reports Sunday.
The court overturned a district court ruling that ordered a life insurance company to pay the full amount stipulated in both the main and special contracts to the parents of a man who killed himself in February 2012, two years after taking out the contracts, Yonhap news agency said.
The parents asked for all of the insurance money following their son’s death, but the company only paid the 70 million won in the main contract and refused to pay the 50 million won in attached special contract.
They filed a suit against the company asking for the payment of 70 million won. The district court upheld their request ruling that both the main and special contracts both carried the death benefit clause that payment would be made in the case of suicide two years after the policyholder bought the product.
But the appeals court saw the case differently.
It said the clause was mistakenly used on the special contract as was only supposed to be on the main contract.
“It is unreasonable to urge the insurance firm to pay additional money after the firm mistakenly left the clause on the special contract,” the court was quoted as saying by Yonhap.
When buying an insurance policy, most people do not regard suicide as accident. Given this, insurance firms do not have the duty to pay death benefits to the parents, the report said.
Insurance companies have become more sensitive to suicide-related terms when they sell insurance policies as the country’s suicide rate is the highest among members of the Organization for Economic Cooperation and Development (OECD) as of August.
An average of 29.1 people per 100,000 killed themselves in 2012, higher than the OECD average of 11.9, based on data compiled for 25 of 34 members, according to data from the OECD Health Statistics 2015.