Beneficiary claims USAA cites suicide in refusal to pay policy

The beneficiary of a USAA life insurance policy is suing the company for refusing to honor the policy because the insured allegedly committed suicide.

Willis Barstad filed a lawsuit against USAA Insurance Agency Inc. on March 21 in St. Clair County Circuit Court.

Barstad is the beneficiary of a term life insurance policy issued to Heather Barstad in November 1999 by USAA Insurance Agency. The policy, according to the complaint, contained a contestability clause providing a reduced benefit in the event of death by suicide within the first two years.

After paying all premiums for 11 years, Heather Barstad allegedly increased the policy limits from $100,000 to $250,000. The increased policy also "contained a two-year contestability/suicide clause," the complaint states. Willis says Heather paid all premiums and was in full compliance with all contractual terms of the policy.

Heather Barstad died March 7, 2012 in Belleville allegedly by suicide, the suit says. Willis says USAA refuses to pay the $250,000 benefit or even $100,000 -- the limit for which the insured allegedly paid 11 years worth of premiums.

Willis Barstad says USAA has denied paying on the policy, citing "the suicide clause of the second policy." He claims, however, the only applicable contestability clause is contained in the policy issued in 1999. Willis contends the full amount of $250,000 should be paid to him, the policy beneficiary, because Heather's death was not within the first two years.

Barstad is asking to be awarded $250,000. If the Court determines the contestability/suicide clause is applicable on the policy increase, he says it should "be limited to additional insurance provided in it and that is unenforceable as to the original $100,000." He would, therefore, request USAA pay him $100,000.

Attorney Marc W. Parker of Maryville represents Willis Barstad.

St. Clair County Circuit Court 13-L-152