Dying to insure

Last Friday, The Australian columnist Jamie Walker delivered a shrill pitch against assisted dying titled "insurers baulk at 'suicide cover' as SA debates euthanasia." In it he claimed that legalisation of assisted dying would "force a showdown with the $28 billion life insurance industry."

Such was Mr Walker's hyperbole that it seemed the legalisation of assisted dying might single-handedly lead to the collapse of a massive section of the national economy.

The fall guy for the argument was the current South Australian (SA) Voluntary Euthanasia Bill. Section 28 of the Bill prohibits insurers from excluding a life policy payout for an insured person who dies under the Bill's voluntary euthanasia provisions.

Mr Walker's article argued that such an exclusion would be in conflict with Commonwealth law. (Section 228 of the Life Insurance Act 1995 (Commonwealth), which is not named in the article, expressly permits exclusion of suicide cover from life insurance policies). In the article, Financial Services Council (FSC) CEO Sally Loane refers to Section 109 of the Constitution of Australia which rules that Commonwealth law prevails over State law when there is any conflict between the two.

If these points were all the relevant facts,then the SA Bill's insurance exclusion clause would simply fail to be of any force or effect and the world would keep turning as before.

But they aren't all the facts.

Section 28 of the SA Bill states that insurance policies may not exclude a payout in relation to 'voluntary euthanasia.' However, the Commonwealth Life Insurance Act is completely silent on the matter of voluntary euthanasia: it permits policy exclusion only in respect of 'suicide.'

Further, Section 23 of the SA Bill expressly states that a death under its provisions is not a suicide, and may not be determined as such even by the Coroner.

Consequently, there is no actual 'suicide' conflict in law. Indeed, a similar 'not a suicide' provision has stood in Oregon's Death With Dignity Act (DWDA) since 1997 with no crisis - or even ripple - in the USA insurance industry.

So much for the spectacular "showdown."

The 'suicide' argument not only fails in law, but in practice as well. Most life insurance policies in Australia do in fact cover suicide, except for the first year of insurance. To avoid the creation of an insurance policy with the intention of a payout claim by suicide, most Australian policies exclude suicide for the first thirteen months. That extends across the first year of insurance plus a 30-day grace period to pay the renewal premium.

Thus, most Australian life insurance policies cover suicide once a renewal premium has been paid.

And what effect would assisted dying coverage have on the life insurance industry? The Society of Actuaries has published a thorough analysis of the impact of Oregon's DWDA on USA insurance companies. It calculated such a microscopic potential effect that it concluded there would be no "material impact on life insurance claim costs."

Therefore, even if one were to argue that the assisted death of a terminally ill individual - after careful consultation and deliberation - was 'suicide,' most Australian life insurance policies would still be due to pay out just as if the individual had died from what we usually refer to as suicide. Plus, it would have no material effect on insurers.

It was largely redundant then for the FSC to write to the South Australian Government to express 'concern' that the SA Bill doesn't refer to a death under its provisions as 'suicide', thereby subtly acknowledging that there was no 'suicide conflict' in law in the first place. (In fact it is a Private Member's Bill, not a Government one.)

Such was its reaction, it would be hard to imagine that the FSC doesn't already plan to instead try and persuade the Federal Parliament to add 'assisted dying' alongside 'suicide' as a permissible exclusion in Section 228 of the Life Insurance Act, even in the absence of significant benefit for insurers. If successful, Commonwealth law precedence would then protect insurer rights to expressly exclude life cover for assisted dying regardless of any State laws to the contrary.

But insurers would then be declaring to the Australian public, the overwhelming majority of whom want assisted dying choice legalised, that "we will pay out on the policy if you die in extremis from the horrific but 'natural' effects of your illness,or you are driven into pharmacological oblivion through terminal sedation until you die no matter how long it takes, or you starve and dehydrate yourself to death by refusing all interventions and sustenance, but we will not pay out if you die a lawful, peaceful, physician-assisted death in the same circumstances."

Good luck with the public relations exercise on that one.

In the meantime, Australians can see for themselves what a beat-up this report was: in the first instance concocting a pseudo-crisis about supposed conflicts in 'suicide' insurance law, in the second instance side-stepping the fact that most Australian life insurance policies currently cover suicide anyhow, and in the third instance ignoring independent analysis showing no significant effect for the life insurance industry after all.

What will be the next confected argument against assisted dying choicefor Australians in untreatable extremis? Just wait for it.