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Around the world, it's common practice for insurance agents to ask for a medical checkup when putting together a life insurance policy. Underwriters don't want to insure someone who's likely to die soon from disease. But in suicide-prone Japan, agents engage in financial profiling and sometimes want a peek at bank records. If a buyer of a big policy is up to his neck in debt, the alarms go off. The person could be planning to kill himself to win financial security for his family.

It's a macabre twist on Japan's suicide epidemic, and one that the nation's insurers are getting wise to. Until recently, Japanese insurance companies generally honored contracts by policyholders who killed themselves. There was a proviso: Families couldn't collect for 12 months or more. Insurers figured suicidal clients would reconsider if they thought their family would be hounded by debt collectors after their death. Now, with the suicide rate soaring and insurers struggling financially, underwriters are hardening their hearts. They are boosting the waiting period and taking advantage of a legal loophole to rip up policies in the case of suicide.

Japanese life insurers have long been more accommodating of suicide than their U.S. counterparts, who refuse to honor policies on people who kill themselves. During the '70s and '80s, the Japanese industry enjoyed healthy growth, while a booming stock market boosted the return on investment portfolios. There was also the feeling, says Life Insurance Assn. spokesman Hayato Komada, "that we should focus on the life of the spouse after the primary insurer commits suicide." Hence, Japanese underwriters relaxed a previously imposed two-year waiting period before paying benefits.

That benevolence began to wane in the late 1990s. Since then, a depressed stock market, slow growth of premium income, and a string of insurance failures have rocked the world's No. 2 life insurance market. In 1999, Sumitomo Life Insurance Co. reimposed the two-year rule. With the increased number of suicides, it took little prodding for other insurers to follow.

More recently, such life insurers as Alfac Japan and DIY Life Insurance, a unit of Nissan Fire & Marine Insurance, have told customers that in suicide cases they won't pay a yen for three years. And the industry has taken heart from two lawsuits filed by relatives of suicides who received no payout at all. In both cases, the plaintiffs lost because there was proof of intent to profit from suicide; one case is under appeal.

It all may seem cruel, but the Japanese are waking up to the fact that too many of their compatriots are taking their lives. For suicide-prevention counselors, the cultural predisposition to suicide is bad enough. Adding an economic incentive is just asking for trouble. By Brian Bremner in Tokyo


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