By Kim Bo-eun
The Supreme Court Thursday ordered a life insurer to pay for suicides, recognizing suicide as an accident, in the first ruling of its kind.
In the suit filed by the parents of a man who committed suicide against a life insurer to demand an insurance payout for his death in addition to general life insurance, the top court overturned the lower court verdict which judged that the insurer was not obliged to pay. The top court sent the case back to the Seoul Central District Court.
The dispute had arisen over two contradicting clauses in the life insurance policy. The main contract stated that the insurer did not recognize intentional self-inflicted harm as accidental. A special contract attached to the main one, however, stated that the insurer should cover the suicide of the policyholder when it occurs two years after the contract goes into effect.
“It is well recognized that consumers will interpret the clause in the special contract as the insurer having the obligation to cover suicides when they occur two years after the contract went into effect,” the court said.
The man who had bought the policy in 2004 was found dead in February 2012.
His parents asked the insurance company for the payout specified in the general life insurance contract, which was 70 million won. But the insurer refused to pay 50 million insured by the special contract, citing the main contract which said suicide cannot be regarded as an accident. The parents later filed the suit against the company.
A local court recognized the clause in the special contract, and ordered the insurer to pay the parents the 50 million won.
However, the appeals court reversed the decision, putting weight on the main contract which does not recognize suicide as an accident.
“This ruling has clarified the interpretation of the clause in which there was much confusion from earlier rulings,” a Supreme Court official said.
Life insurers have been embroiled in legal battles over the interpretation of insurance contract pertaining to suicide for several years. Following this ruling, it is expected that insurers will have to cough up some hundreds of billions of won in casualty insurance payments they had previously refused to pay.