4.7.2 Common Disaster Provision
Does the Uniform Simultaneous Death Act eliminate the need for a Common Disaster Provision?
The law applies and clears the way for claims to be paid only where there is "no evidence that the insured or the primary beneficiary survived each other."
Under the common disaster provision, a certain period of time is designated so that, even though both the insured and the beneficiary died as a result of the same accident, it is possible to determine that the beneficiary died last and policy disbursements would be distributed accordingly.
If the time of death could not be established and Bob was the only one insured and Sue was the named beneficiary, under the Uniform Simultaneous Death Act it would be determined that Bob died last. Therefore, the policy proceeds would go to the policy's secondary beneficiary. However, if Sue outlived Bob for the predesignated time stipulated under the common disaster provision (usually 14, 21, or 30 days), it would be determined legally that Sue died last.
For example, if Bob's policy stipulated 30 days under the common disaster provision and if Sue died on the 30th day, Bob would still be considered the one who died last and the proceeds would be disbursed according to his beneficiary instructions. However, if Sue died on the 31st day, Sue would be considered the one who died last and the proceeds she inherited from Bob's policy would go directly to Sue's beneficiary (typically through a will).
The Uniform Simultaneous Death Act does not eliminate the need for a common disaster clause. It simply clears the way for paying claims. If there is sufficient evidence that a beneficiary survived the insured, the proceeds will still pass through the beneficiary's estate and then to the beneficiary's heirs.
What is the purpose of a Common Disaster Provision?
To provide a sequence of beneficiaries for the distribution of proceeds in the event of the simultaneous death of both the insured and primary beneficiary.
