The Strangest Life Insurance Cases in History and the Industry That Accidentally Made Death Profitable

Life insurance is one of those products that sounds completely normal until you describe it out loud. You pay a company money every month. If you die, they give a larger sum of money to someone you designated. The entire value proposition depends on you ceasing to exist. The industry is built on the premise that your death is a financial event with a calculable value.

This was not always considered a respectable business. For most of human history, attaching a monetary value to a human life was considered either sacrilegious or simply bizarre. The industry had to fight for legitimacy while simultaneously attracting every possible kind of fraud, scheme, and murderous intention that putting a cash value on a death could generate. The result is one of the stranger chapters in financial history.

Where It Started

Modern life insurance traces its origins to ancient Rome, where funeral clubs collected dues from members to cover burial costs. The Romans considered a proper burial essential for the afterlife, and the clubs ensured members wouldn’t be left unburied through poverty. This is recognizably insurance: pooled contributions covering a shared risk.

The modern industry, however, grew out of a coffee house. In 1688, Edward Lloyd’s Coffee House on London’s Tower Street became the prime gathering place for ship captains, ship owners and merchants who needed to share risk on sea voyages. Merchants would underwrite each other’s ships, each signing their name below the amount they were willing to cover if the ship sank. This is where the word underwriter comes from.

Astronomer Edmond Halley, best known for computing the orbit of the comet that bears his name, constructed the first mortality table in the 1690s, giving insurers a statistical basis for calculating how long people were likely to live. Life insurance could finally be priced rationally. What followed was not always rational.

The Problem With Making Death Profitable

Early life insurance had a fundamental design flaw that took decades to fix: you didn’t have to insure your own life, or the life of someone you knew. You could insure anyone’s life. Strangers. Enemies. Public figures. The king.

This turned life insurance into a form of gambling. People bought policies on the lives of elderly or ill public figures and waited to collect. There were active markets in policies on the lives of sick celebrities. If the person recovered, you lost your premiums. If they died, you collected. This practice became so widespread and so obviously problematic that Britain passed the Gambling Act of 1774, requiring that the policyholder have an “insurable interest” in the life being insured. In other words, you had to have a genuine financial reason to care whether the person lived.

This rule exists in some form in most insurance markets today. It does not eliminate fraud. Nothing eliminates fraud. It just shapes what form the fraud takes.

Michael Malloy and the Murder Trust

In 1932, a speakeasy owner in New York named Tony Marino decided to solve his financial problems by insuring a homeless alcoholic named Michael Malloy and then killing him. The plan seemed foolproof. Malloy drank heavily and was already in poor health. Marino and five associates took out three separate life insurance policies on him. Then they started trying to kill him.

They served him antifreeze instead of alcohol. Malloy drank it and came back the next day. They mixed in turpentine and rat poison. He kept drinking. They gave him raw oysters soaked in wood alcohol. He ate them. They fed him spoiled sardines mixed with metal shavings. He survived. One night they left him passed out in a park in January during a blizzard. He turned up at the bar the next morning asking for a drink.

The gang eventually ran him over with a car at 45 miles per hour. He survived that too. They finally killed him by inserting a gas pipe into his mouth while he slept and turning on the gas. He died on February 22, 1933. The police became suspicious. The gang was arrested, tried, and several of them were executed. The press called them the Murder Trust. Michael Malloy had survived six murder attempts before the seventh one finally worked.

The Man Who Signed His Own Death Certificate

In 2005, Anthony McErlean faked his own death by impersonating his wife and claiming that he had been killed after being struck by a cabbage truck while traveling in Honduras. He stood to collect around 500,000 British pounds. The insurance company asked police to investigate. Police dusted the submitted documentation for prints and found Anthony’s fingerprints on his own death certificate.

This story appears in every roundup of insurance fraud and deservedly so. The cabbage truck detail is important. It is specific enough to sound plausible and absurd enough to invite scrutiny. He signed his own death certificate. His own fingerprints were on it.

The Black Widows of Los Angeles

Helen Golay and Olga Rutterschmidt befriended homeless men, took out life insurance policies on them, and then ran them over with a car to collect the payout. They pulled this off twice, in 1999 and 2005, before police became suspicious. Both women received life sentences for the murders of Paul Vados in 1999 and Kenneth McDonald in 2005.

The specific mechanism they used, establishing a relationship with the victim before taking out a policy, was designed to satisfy the insurable interest requirement that had been law since 1774. They claimed to be business partners, relatives, and in one case a fiancée on various applications. The 250-year-old legal fix to prevent gambling on strangers’ lives did not prevent this, because they created the appearance of a genuine relationship first.

The Slayer Rule

Every fraudulent life insurance case eventually runs into a legal principle called the slayer rule: a person who intentionally kills someone cannot collect life insurance benefits from that death. The rule exists in some form across most jurisdictions. It seems obvious. It requires codification specifically because people kept trying.

The rule has generated its own case law, covering situations like whether ordering a murder counts the same as committing one (generally yes), whether a killer’s children can collect even if the killer cannot (sometimes), and what happens if the killing was somehow accidental but the policyholder was still implicated (complicated, expensive, litigated).