Life Insurance Payouts For Missing Persons: What You Need To Know

Life insurance is intended to provide financial support to the family and loved ones of the deceased. However, what happens when a person goes missing without a trace? Can their loved ones claim the insurance money? The short answer is yes, but it's a complex process. Here's an overview of the topic, including the challenges faced by beneficiaries, the criteria for declaring a person legally dead, and the potential consequences of insurance fraud.

The process of claiming life insurance for a missing person

When a person goes missing, their family often endures emotional, legal, and financial challenges. If that person had life insurance, their loved ones may be entitled to a payout, which could help alleviate some stress during an already difficult time. However, navigating life insurance for missing persons is complex.

Step 1: File a missing person report

The beneficiary or any other person who was not in contact with the policyholder should first file a missing report with the police.

Step 2: Get verification from the court

If the person cannot be traced after seven years of being reported missing, a non-traceable report from the police can be collected and submitted to the court to obtain a court order presuming the insured person is dead. According to the Indian Evidence Act, Section 108, a person can be presumed dead if they have been missing for at least seven years when the FIR (First Information Report) was filed.

Step 3: Contact the insurance company

After collecting the necessary confirmation from the court, i.e., the death certificate, the beneficiary should contact the insurance company with the declaration of the court. Under the rebuttable presumption of death, the insurance company will have to pay out the assured death benefit proceeds.

Step 4: File a claim

Once the missing person has been declared legally dead, the process of filing a claim is straightforward. The beneficiary will need to contact their insurance agent to learn about their insurer's specific processes for filing claims. They will direct the beneficiary to the appropriate claim form, which can typically be sent over by fax or email, or completed on the insurance company's website. To file a claim, the beneficiary will need the insured's death certificate, tax forms, and other identifying documents.

Step 5: Wait for the claim to be processed

Once the claim has been submitted, it can take some time to process. The beneficiary should stay in touch with their insurance company to ensure that things are moving forward.

Other options

If the above steps do not work, the beneficiary may be able to negotiate with the insurance company to reach a partial settlement. While they will not receive the full death benefit, they will get the money much faster, which can make a huge difference to the family's overall well-being. Additionally, the insurance company cannot take the money back if the insured is later found to be alive.

Alternatively, the beneficiary can petition the court to change the insured's status to legally dead, or sue the insurance company for the death benefit.

Criteria for declaring a missing person legally dead

The criteria for declaring a missing person legally dead vary across different countries and states. However, here is a general overview of the criteria and the process involved:

Time Period:

• In many common law jurisdictions, a person is presumed dead if they have been missing for an extended period, typically seven years, with no evidence to the contrary.
• This period can be shorter if there are circumstances that overwhelmingly support the belief that the person is dead, such as an airplane crash, or if the person is exposed to imminent peril and fails to return.
• Some states in the US, such as Minnesota and Georgia, have reduced the period to four consecutive years.
• In China, a person can be declared dead after being missing for four years or two years in the case of an accident.
• In Poland, the minimum time period is generally ten years, but it can be reduced to five years if the person would have been at least 70 years old at the time of declaration.
• In the UK, the Presumption of Death Act 2013 allows for a person to be declared dead if they have been missing for seven years or if there is sufficient evidence to suggest that their death is either virtually certain or highly probable.

Absence and Lack of Communication:

• The absence of the missing person must be continuous and without any reasonable explanation, such as finding a new job and moving away.
• There must be no communication from the missing person during the period they have been missing, especially with those people most likely to hear from them.

Search Efforts:

• A diligent search for the missing person must be conducted, including notifying law enforcement and, if possible, hiring a private investigator.
• Advertising in newspapers or periodicals about the missing person and providing contact information is also recommended.

Court Declaration:

• To declare a person legally dead, a petition or application must be filed with the appropriate court, typically in the county where the missing person last lived.
• The petition should include supporting evidence, such as witness statements, police reports, and other relevant documents.
• The court may hold a hearing, especially if there are objections or challenges to the declaration of death.
• If the court declares the person legally dead, a death certificate can be obtained, which is necessary for claiming life insurance benefits.

It is important to note that the specific requirements and procedures may differ based on the jurisdiction, and it is advisable to consult with a qualified attorney to navigate the process effectively.

Circumstantial evidence for claiming life insurance

Circumstantial evidence is any evidence that requires some reasoning or inference to prove a fact. It is sometimes referred to as "indirect evidence" and may have more than one explanation or lead to more than one conclusion. In many situations, more than one piece of circumstantial evidence may be used to draw the judge or jury to a specific conclusion.

In the context of claiming life insurance for a missing person, circumstantial evidence can play a crucial role in establishing the presumed death of the insured individual. Here are some examples of circumstantial evidence that may be considered:

• Absence of Communication: If the missing person has been absent without any communication for a continuous and specific amount of time, typically seven years, it can be considered circumstantial evidence.
• Absence of Reason for Disappearance: There should be no reasonable explanation for the disappearance, such as the person being a fugitive from the law.
• Diligent Search Efforts: It is important to demonstrate that a diligent search for the missing person has been conducted. This could include police reports, investigation records, and witness testimonies regarding the search efforts.
• Presence at a Catastrophic Event: If the missing person was known to be present during a catastrophic event such as an airplane crash, flood, or other circumstances like a terrorist attack, circumstantial evidence may be sufficient to state the date of the event as the date of death.
• Inconsistencies and Behavioural Changes: In cases where foul play or suspicious circumstances are suspected, inconsistencies in statements, behavioural changes, and expressions of intent can be considered circumstantial evidence. For example, if the insured person expressed an interest in selling their house and leaving shortly before their disappearance.
• Financial and Digital Trail: Examining the financial and digital activities of the missing person can provide circumstantial evidence. For instance, if there is a sudden cessation of financial transactions or digital activity, it could suggest that the person is no longer alive.

It is important to note that circumstantial evidence regarding a missing person may not directly prove their death, but it helps create a compelling picture of the incident, leading to valid conclusions. When combined with direct evidence, such as a death certificate or official declarations, it can strengthen the case for claiming life insurance.

Partial settlements

In the case of John and his mother Linda, who went missing from a memory care facility, John reached a $300,000 settlement with the life insurance company after three years of his mother being missing. This settlement amount was less than the full $500,000 death benefit, but it provided John with financial support during a challenging period. When Linda was eventually found, the insurance company could not request the $300,000 back from John. However, John will not receive any additional funds when Linda passes away.

Consulting a legal advisor

• Understanding the Policy and Local Laws: A legal advisor can help you understand the specific terms and conditions of the life insurance policy in question. They can also advise you on the laws and regulations relevant to your situation, including any time requirements or exceptions that may apply.
• Gathering Necessary Documentation: To make a claim on a missing person's life insurance, various documents will be required. A legal advisor can guide you on obtaining and organising the necessary paperwork, such as police reports, court orders, death certificates, tax forms, and other identifying documents.
• Filing the Claim: The process of filing a life insurance claim can be daunting, especially during an already emotionally challenging time. A legal advisor can assist you in navigating the claims process, ensuring that you meet all the requirements and deadlines set by the insurance company. They can also help you communicate and negotiate with the insurance provider effectively.
• Exploring Alternative Options: In some cases, there may be alternative options available to beneficiaries. A legal advisor can advise you on these options, such as negotiating a partial settlement with the insurance company or petitioning the court to declare the missing person legally dead. They can help you weigh the benefits and drawbacks of each option and make an informed decision.
• Preventing Insurance Fraud: Consulting a legal advisor can help prevent insurance fraud, which is a serious concern for insurance companies. They can guide you on the steps to take to strengthen your case and avoid any allegations of fraud. This includes documenting all aspects of the insured person going missing, such as police reports, witness statements, and your own account of the situation.
• Handling Communication and Correspondence: Dealing with insurance companies and legal processes can be overwhelming, especially while grieving. A legal advisor can handle communication and correspondence on your behalf, allowing you to focus on your well-being and emotional support systems.

It is important to remember that each case is unique, and consulting an experienced legal advisor who understands the intricacies of life insurance and missing persons cases in your specific jurisdiction is essential. They can provide personalised guidance and ensure that your rights and interests are protected throughout the process.

Frequently asked questions