It was reported in the news today that Reliastar (also known as ING) won't pay Heath Ledger's 10 million dollar life insurance policy until their investigation is finished.  They are crying foul on 2 issues:              

1.  Cause of Death.  ING is investigating if it was a suicide.                        

2.  "Bad Faith" in applying for coverage.  They are saying he didn't disclose his physician information or prescription drug use.

Heath Ledger purchased the policy 6 months before he passed away.  Therefore it falls within the 2 year contestability clause that every life insurance policy has.  Basically, in this situation the insurance company doesn't have to pay the death benefit if they find this to be a suicide. 

Let me address the cause of death.  It was reported as an accidental prescription drug overdose by the coroner back in January. Life insurance companies have their own private investigative people who do all of the detective work. For $10M within 6 months of issue, you better believe they are going to investigate. And yes, ING can draw their own conclusion regardless of what the law or coroner says.

Let me address the "bad faith" and material misrepresentation.  I don't know exactly what he didn't disclose, supposedly it was prescription drug usage and his physician info (again this is what I read, not confirmed).  Either way it's on ING to get this information BEFORE they issue a policy.  ING should of requested his information and medical reports or never of issued the policy.  You CANNOT re-examine applications after the death of the policy holder.

In case you were wondering, Heath Ledger, a 28 year old male non-smoker (not sure if he smoked or not) with preferred rates, asking for $10 million of life insurance is only $5500 a year at level rates for 20 years. 

Here's what I think will happen:

ING will deny the claim because they will determine it to be suicide or material misrepresentation.  Heath's estate will sue ING and will go before a judge or jury.  Guess what?  Most juries do not like insurance companies.  So I think this will settle out of court.

As a life insurance agent, I would be very upset if this was my client.  I sell life insurance to protect families and their futures.  Heath Ledger went out of the way to protect his family and recognized the value of life insurance.  The insurance company already had their chance to deny the application and should of done their due dillegence before issuing the policy

So now there is a young girl, whose father died, but made sure she was taken care of for the rest of her life...and the insurance company is doing everything it can to avoid paying.  I pray that this claim gets paid without dragging Ledger's name through the mud.

I'd love to hear anyone's thoughts on this matter...