What happens if a person with life insurance goes missing and is found many years later?

2 thoughts on “What happens if a person with life insurance goes missing and is found many years later?”

1. Nathan L November 30, -0001 at 12:00 am

   There are actual cases where this has occurred. In cases where the beneficiary was suspected of knowing that the insured person was alive, they have faced fraud charges. In cases where they appeared to act in good faith, the legal consequences are less severe, but the likelihood of the insurance company to sue for their money back will depend on the circumstances and the amount of the payout.

   One interesting case was a woman who abandoned her family and didn’t reappear until 11 years later. The family didn’t know where she was, so they probably won’t end up paying back the relatively small $100,000 that they received.
2. mhoran_psprep November 30, -0001 at 12:00 am

   In the United States if the person insures an article and then claims a loss of that article, the insurance replaces the missing/destroyed article. If later on the item is found the original is owned by the insurance company. The person who purchased the policy doesn’t get to keep both.

   Of course if the item was so valuable to be priceless the insurance company would be open to an exchange of items or money.

   But if they suspect fraud…then it becomes a legal matter.

   Even when a life isn’t involved it can be a source of dispute: http://www.artnet.com/magazineus/news/spencer/spencers-art-law-journal5-7-10.asp

   INSURED V. INSURER: WHEN STOLEN ART IS RECOVERED, WHO OWNS IT?

   Kenneth S. Levine

   This essay is about the word “subrogation,” which frequently appears
   in insurance policies. An insured painting is stolen and the insurance
   company pays the owner’s claim for the value of the painting. Many
   years later, when the painting is recovered, its value is many times
   what it was when the insurance claim was paid. The insurance company
   takes the position that it owns the painting, while the owner says I
   own the painting, less the value of the insurance proceeds received.
   The resolution of this dispute depends on the meaning of the word
   “subrogation” in the insurance policy.

   When life insurance is involved, the item being replace is the lost stream of income. The question of returning money and how much would be a legal issue. They would also want to know if there was fraud, and who was involved.