So, I’ve started watching the NBC series Manifest on Netflix. I am up to the fourth episode and an important plot point is that an insurance company is demanding that a death benefit be repaid.
In the story, a group of people go missing for five years and then are suddenly returned. The mechanics of all that are unimportant. What matters regarding my question is that the wife of one of the missing people filed a claim on her husband’s life insurance. The claim was paid, but now the husband turns out not to be dead, so the insurance company wants the death benefit returned.
The fanciful premise of the fictional TV not withstanding, how would this work in real life. Surely, in this big world of ours, someone has been reported dead, the insurance paid out, and then the reports of the person’s death turn out to be greatly exaggerated. Like the TV show, assume no fraud is being perpetrated by anyone. The wife honestly filed a claim on the life insurance and all involved acted in good faith.
How could this be resolved in real life?
(I’m only up to Episode 4 in Manifest, so I have no idea how this issue is resolved on the TV show. Please avoid spoilers.)
In the example quoted at the end of the article, the beneficiaries were off the hook because of their legitimate belief in the person’s death, but as the individual in question effected his disappearance as deliberate fraud, the insurer went after him with a vengeance. Seems like if all parties are above board with their intentions, there would be no grounds for recovery.
I don’t think comparing it to an insurance payment for property loss is applicable. When a claim is paid for property, the legal ownership of the property is transferred to the insurance company. When an insurance company “totals” your car after a crash, you have to surrender the title to the car to them. It’s now their wrecked car.
Once, my daughter’s clarinet was stolen (she actually carelessly lost it). My insurance paid me the value of the clarinet. The clarinet was recovered a few days later. I returned it to the insurance company since they effectively bought it from me. They turned around and offered to sell it back to me. I jumped at it and ended up with two clarinets for the price of a little more than one.
Poking around on google, apparently there are life insurance payouts and there are life insurance payouts. They aren’t all the same.
So if a person goes missing for a lengthy period of time (typically 7 years), they aren’t a fugitive or have any reason why they wouldn’t want to be found, and there has been a reasonable search to find the person, then the courts may declare this person to be legally dead.
At this point the insurance company will pay out for what is called a “rebuttable presumption of death”. This means that there is no definitive proof of death and the person could theoretically just come wandering back into town or whatever. In this particular case, if the person is later discovered alive, the insurance company has the right to take back the death benefit along with accrued interest.
However, if the beneficiary of the insurance policy and the insurance company reach some sort of settlement, then they are both bound by that settlement. In other words, if Bob has a $100,000 insurance policy and goes missing, and Bob’s family and the insurance company reach a settlement after only 3 years for the company to pay out $50,000 immediately (instead of waiting the typical 7 years), then if Bob comes walking home a year later, then the insurance company does not have the right to take the money back. The insurance company is also not required to make any additional payments for Bob. If Bob dies 3 years later, the insurance company already paid out on his policy and they owe nothing.
There is also the complication that the insurance policy is basically a contract, and anyone can put whatever they want into the terms of the contract. If Bob goes missing, the first thing his family needs to do is read the fine print of his insurance contract.
Since you typically have to wait 7 years to have someone legally declared dead, this assumes that there was some sort of settlement with the insurance company. Typically this means that the insurance company doesn’t have the right to ask for the money back, but then again it also depends on exactly what was written into that settlement agreement. If the settlement agreement says that the beneficiaries need to return the money if the missing folks are found alive later, then they do have to pay the money back.
Not necessarily - different jurisdictions have different time limits. But the details of what happened do matter - if someone simply disappears , then it will take the five or seven or however many years before they will legally be declared dead. But that’s not always the case - it didn’t take years for death certificates to be issued for 9/11 victims. And it appears that in the TV show, from the perspective of those not on the plane, the entire plane simply disappeared. Which would lead to an assumption that it crashed somewhere , all the passengers were dead and the wreckage hadn’t been found way before even five years have passed. It’s not like a single person went missing. Maybe one person just doesn’t want to be found - but it’s not plausible that a plane crashed, people survived and they all took the opportunity to play dead and start over.
It also depends on how they “go missing.” If they go missing it such a way as to presume death, they may be declared so without the usual prescribed time period. For example, if an airplane disappears from radar over water in bad weather, and no trace is found of it, after a few weeks, the search may be called off, and the passengers presumed dead, legally.
There was a interesting example about 10 years ago in Ohio (?) where some guy abandoned his wife and kid in the 1980s, the wife got a legal declaration of death in 1990s, and then he reappeared in 2010s. It was interesting because the state law had a statute of limitations for challenging a judicial declaration of death that had long expired, so the court denied his attempt to overturn the death declaration (despite his, obviously, being alive).
But, as a related issue, as I recall, Social Security wanted the death benefits back (plus interest) that it had paid to his wife.
I’m not sure how that turned out, but everything I recall indicated that SSA was well within its authority to demand repayment – although the whole “still legally dead” and the sheer amount of time made it weird.
A co-worker had something like this happen to him. His Harley Davidson motorcycle was stolen only 3 months after he bought it. It took about a year but the insurance company paid him for his loss. About a year after that, the remains of the motorcycle were found in a chop shop with many others. He wanted the remains but his insurance company said it belonged to them, they paid him for his loss. He wanted to sue but he couldn’t find an attorney to take his case, he had no chance of winning. It was later put up for sale at an auction but he was outbid. After all this he still howls about his motorcycle being stolen twice.
If it’s this one , it was actually a little different. He claimed he wanted to reactivate his SS number to be able to work and get a driver’s license and his wife’s lawyer was opposed to overturning the declaration for fear she would have to repay the benefits - but I never believed he wanted the SS number for a drivers license and to work. He had apparently been working off he books for 20 years and either wasn’t driving, did have a license or was driving without one during that time , but now when he’s nearly old enough to collect SS benefits he comes out of the woodwork?
Yeah! That’s the one. And Googling his name gives me an article on the SSA trying to recoup the benefits paid to the wife/children. (I’m pretty sympathetic to the wife in this situation).