Mystery & True Crime • News, Features & Interviews
Insure to Death:
Life Insurance and the Crimes It Inspired
Reprinted from the Spring 2015 issue of Prose ‘n Cons™ Mystery Magazine
The big insurance payout.
It’s been used as the motive in countless books, TV series and movies. Yet while
homicide is the most popular fictional means to this lucrative end, it is just one
way criminals have tried to defraud insurers over the years. More cunning, though
generally less successful, are plots of faked suicides, mysterious disappearances,
and even self-mutilation.
From ancient days there have been guilds whose members banded together to care
for the sick and infirm among them. By the middle ages, insurance against slavery
and capture by pirates was common. Eventually, indemnity against other likely hazards,
such as death at sea, became accepted investments. Soon, though, people were speculating
on all kinds of risks - real or not - ranging from robbery and murder by highwaymen,
to whether a man might divorce, and even loss of chastity. It was just a short leap
from these hedges to betting against the human lifespan.
It is an interesting commentary on mankind that one of the first recorded life
insurance policies was purchased as a gamble. In London in 1583, Richard Martin secured
a policy on a man named William Gibbons. The policy covered only a one-year period.
If Gibbons were to die within those twelve months, Martin would receive a handsome
As ghoulish as it sounds, this practice was actually quite widespread. It was
not uncommon for neighbors to, in effect, wager on the life expectancies of one another.
More disconcerting, however, was the ability of perfect strangers to buy policies
on one another - a serious cause for concern, particularly when the insured showed
no inclination to die on schedule. It didn’t take long for impatient policyholders
to realize that a little push might speed the payout.
Graveyard insurance, as the practice of insuring the soon-to-be-deceased was known,
was a lucrative business for sales agents. There are few more notorious examples
of the sordid side of this business than a series of cases in Pennsylvania in the
1880s. For several months, speculators in Lebanon, Berks, Montgomery, York and Luzerne
Counties gambled on the death dates of octogenarians, paupers and consumptives.
Mrs. Emma Reinart of Amity Township, Berks County, died of consumption while staying
at the home of her father. The grieving parent was shocked to learn of a policy on
his daughter’s life worth $26,000. It favored her first cousin who had little, if
any, relationship to the departed.
The most notorious of these Pennsylvania schemes involved a group of men who would
live in infamy under the collective moniker “The Blue-Eyed Six.” Their victim, Joseph
Raber, lived at the foot of the mountain range bordering what is today the Fort Indiantown
Gap National Guard Training Center. Half a dozen of his neighbors contributed toward
the purchase of a life insurance policy valued at $8,000. Once purchased, two of
the conspirators lead Raber to a narrow stream, tossed him into the water, and held
him down until he drowned. Unfortunately for the would-be beneficiaries, one of the
conspirators was a talkative drunk. Soon, the plot was exposed and five of the six
men - all of whom one reporter noted had blue eyes - went to the gallows.
Regardless of the bad ending for “The Blue-Eyed Six,” insurance fraud spread to
other counties. More than 200 “death rattle cooperatives” were identified before
the state’s attorney general and insurance commissioners earnestly worked to exterminate
these practitioners. But once exiled from Pennsylvania, operations simply moved to
Ohio, Maryland, Indiana and Massachusetts. Nationwide legislation and penalties finally
killed off these graveyard insurance schemes once and for all.
Of course, not everyone could so callously resort to murder to collect on life
insurance proceeds. For instance, several months prior to Mary Fry’s death, her son
purchased life insurance in her name. Coverage totalled $27,500. He immediately presented
the claims to the insurers who, upon investigation, found Mrs. Fry to be gravely
ill but still breathing. Worse, it was discovered that this scoundrel son was aided
and abetted not just by his mother’s physician, but also the local preacher and others
- all of whom would presumably share in the proceeds.
Other would-be fraudsters planned to cash-in not on others’ deaths, but rather
their own. Drowning was the preferred method of faking a death, likely because it
required no true bodily harm to be inflicted. It did present a problem, however.
In order to prove death to both the authorities and an insurer, a dead body was usually
required. The lack of the corpus delicti presented by a fake drowning scenario inevitably
lead insurers to investigate, and in most cases, deny liability.
Perhaps the most shocking perpetrators of insurance fraud were those willing to
mutilate their own bodies to capitalize on life insurance’s cousin, “accident” insurance.
Unlike life insurance (only payable on death) accident insurance covers catastrophic
bodily injury and loss of limbs and eyes.
In July 1893, a man named Hicks wrote a letter to his insurance company. In it
he explained that, while cleaning his gun, it accidentally discharged, badly injuring
his hand. He would be unable to return to work for at least 30 days, Hicks told the
insurer. By the time he received the claim forms, however, his situation had reportedly
changed. It could be as many as six weeks before his hand healed, he said. Hicks
therefore hoped to return home, where he had no expenses. What could he do to collect
his indemnity sooner rather than later?
Sensing deception, the insurance company launched a full investigation of the
case. The injury was as severe as Hicks had described, that much was certain. What
was less certain was how it actually occurred. Even more suspicious was the fact
that Hicks had also taken out accident insurance with several other companies. When
presented with all of this evidence, Hicks confessed.
“I came to see, by a careful study of what policies covered, a chance to make
big money,” Hicks explained. “I increased my line of insurance accordingly to $20,000
and, had I been successful, I would have collected $7,500 for the loss of my left
hand. I was perfectly satisfied to part with it for that price.”
Hicks was less satisfied with his attending physician who, contrary to Hicks’
wishes, refused to amputate the hand.
As the insurance industry evolved and matured, fraud of any kind became harder
to perpetrate. The most critical deterrent came in 1876 when the Connecticut Mutual
Life Insurance Company filed a lawsuit based on the concept of “insurable interest.”
The principle was simple: unless one individual had a proven and necessary financial
interest, he or she could not insure the life of another person. Certainly, spouses
and children had an insurance interest in a husband or father, for instance. Likewise,
businesses had a proven fiduciary interest in key partners and employees. But estranged
or distant relatives, random neighbors, and greedy insurance agents could no longer
play the lottery of human lifespan speculation.
Not surprisingly, the concept of insurable interest was quickly adopted by other
life insurance companies, as well as state legislatures. It helped staunch the flow
of the morbid, avaricious practices of faux suicide, murder, and self-mutilation
- yet, as with all human behavior, only so much can be controlled through law and
policy. There are still, and likely always will be, those who believe they can pull
the wool over the eyes of insurance adjusters, investigators and medical examiners.
In 1984, while returning from a trip to Atlantic City, Robert O. Marshall and
his wife Maria pulled into a deserted rest stop to, according to Robert, change a
flat. A car pulled in behind him, he said, and someone knocked him unconscious. When
he came to, he found that this wife had been shot to death.
Police had a different theory. Their investigation unveiled Marshall’s massive
debt, ongoing infidelity, and a whopper of a life insurance policy on his wife -
$1,500,000, to be precise. Marshall, an insurance broker, was convicted of his wife’s
murder in 1986. In 1990, Joe McGinnis wrote Blind Faith, a best-selling book about
the case that was later produced as a TV mini-series.
In 2004, Marshall’s death sentence was commuted to life on the basis of ineffective
counsel during his original trial. This spring he was scheduled to appear before
the parole board for the first time since his incarceration. Marshall died in February
2015, just one month before his hearing.
If only there were insurance against guilty verdicts. PnC