Verne Troyer’s family ‘can’t cash in life insurance’ thanks to legal loophole

Verne Troyer’s family face a legal battle to benefit from his life insurance policy after a coroner ruled that the star’s shock death was suicide.

Thanks to a legal loophole, his relatives may have to battle it out with the star’s insurers, six months after he took his own life.

A coroner in Los Angeles yesterday stated that the Mini Me actor’s death was suicide after the star died in hospital on April 21, three weeks after being admitted for alcohol intoxication.

Following an autopsy and further tests, the Los Angeles Department of Medical Examiner-Coroner said on Wednesday that Verne died from the effects of alcohol, after having three times the legal limit of alcohol in his system when he was brought in.

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But now the star’s family could face an uphill battle to benefit from any life insurance policy Verne took out before his death.

Most life insurance policies contain a suicide clause to protect the insurer against anyone who takes out a policy with the intention of taking their own life.

This means many insurance companies have the right to contest the pay-out for suicide if it occurs in the first two years of the policy being taken out.

It was seen in Heath Ledger’s case, when he died in 2008 just seven months after he took out a $10million life insurance policy.

The New York Medical Examiner’s office said that the death was an accident caused by the abuse of prescribed medications, so Ledger’s insurer, ReliaStar Life Insurance Co., launched an investigation to review his application for any incorrect statements before paying the claim.

Lawyers for his daughter Matilda filed a lawsuit, which was eventually settled for a secret amount – believed to be less than original total of $10million.

Another clause could also scupper any plans made by Troyer’s family.

If someone is discovered to have lied on their initial application – for example, about their drinking habits – the insurer can reject the claim.

The family could also encounter problems if any other "material representation" is found in the original application. For example, if any of the facts disclosed in the original application are found to be incorrect, the claim could also be denied, regardless of whether the detail was linked to the cause of death.

In other words, if Verne had lied about something as simple as not smoking cigarettes, and the insurer found out during their investigations that he had in fact smoked, they could reject the entire claim even if smoking played no part in the cause of death.

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