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The question can be interpreted in a couple of ways.

First, if it refers to life insurance (a type of first-party coverage), assuming that the insured was forthright in completing the application (that is, answering all health and lifestyle questions honestly), and the policy was nonetheless issued, it is likely that that the insurer will honor the policy and pay death proceeds. A situation may be, for example, if the insured dies from liver illness due to over-consumption of alcohol.

Alternatively, the question may refer to third-party coverage, such as auto liability insurance. A circumstance that might arise is that the insured is driving while legally intoxicated, has a collision, and kills someone. Many policies have an exclusion for this type of act, because drink driving, if proven, is a crime, tantamount to an intentional act. Liability policies generally cover accidental, not intentional acts, so the insurer may put up a fight over coverage for the occurrence.

As an aside, the law of many states is such that drunk driving can give rise to a claim for punitive damages if the insured injures someone, say, in an auto collision. In order to avoid the potential exposure to punitive damages, the insurer may decide to honor the claim, despite the fact that it may have a technical coverage defense based upon the above explanation.

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14y ago

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