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A person mysteriously disappearing is not a common occurrence but it can happen. For these missing individuals that have life insurance and families, is there anything that can be done? At what point does a missing person get declared dead? Today we’ll answer these questions and more in this article.

When an Insured Person Goes Missing

Someone who is covered by life insurance is called an insured. When an insured person dies, their beneficiaries receive a death benefit check. In order to receive these proceeds, proof of the insured’s death needs to be sent to the insurance company. In the event that there is no evidence of the cause of death or that the person has even died, the situation can become frustrating.

Life insurance is there to replace the income of a provider who has died. Without this ongoing financial support, the family would likely suffer. Life insurance replaces this money.

» Calculate: Life insurance needs calculator

If a provider disappears, rather than dies, this income is still lost. The beneficiaries still suffer. So, are the insurance companies still obligated to pay out the policy’s death benefit? Yes… eventually.

When a Missing Person Is Presumed Dead

In the United States, four things must happen before a court will declare a missing person dead:

  1. The person has been missing without explanation or communication for a continuous specific amount of time (typically seven years),
  2. There must be no reasonable explanation for the disappearance (i.e. a fugitive from the law would not meet this criteria),
  3. There must be total absence of communication from the missing person during these years,
  4. A diligent search for the missing person needs to have been conducted.

The beneficiary of a life insurance policy can then go to the insurance company with the court’s declaration. The insurance company will then pay out the death benefit proceeds under a rebuttable presumption of death.

A rebuttable presumption of death is important to understand in this situation. This means that evidence can be brought at any time to prove the missing person is still alive. If the person who was declared dead later on is discovered alive, the insurance company has the right to take back the death benefit proceeds plus interest.

However, if the insurance company and beneficiary previously compromised on a settlement less than the full death benefit amount then the insurance company does not have the right to take it back.
 

Example:

John’s mother Linda lives in a memory care facility because she has Alzheimer’s disease. Linda owns a $500,000 life insurance policy and John is the primary beneficiary.

One day, Linda wandered away from the facility and could not be found even after extensive searches. After three years, John reached a $300,000 settlement with the life insurance company.

A few months after reaching the settlement, Linda is found miles away in a home for the poor. In this situation, the insurance company cannot request the $300,000 from John; however, John also won’t receive any more funds when Linda does eventually pass away.


 

If the insurance company doesn’t think the case is strong enough to presume the insured dead and denies the claim, the beneficiary has some options.

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A Beneficiary’s Options if an Insured Is Missing

When an insured person goes missing and the beneficiary assumes the person to be dead, the beneficiary will usually file a death claim with the insurance company. If the insurance company doesn’t think the case is strong enough to presume the insured dead and denies the claim, the beneficiary has some options.

The beneficiary can:

  • Petition the court to declare the missing person dead.
  • Sue the insurance company for payment of the death benefit.

If neither of these routes is successful, the beneficiary has no choice but to wait until enough time has passed for the state to declare the insured dead.

While the beneficiary waits, it’s advisable to keep the policy inforce, in other words, keep paying the policy’s premiums. This is because in order for an insurance company to be required to pay the death benefit, the policy must be inforce when the insured dies. If the beneficiary stops paying the premiums while the insured is missing, it’s very difficult for the beneficiary to argue that the insured did indeed die while the policy was active. If it’s discovered that the insured died many years earlier, the beneficiary will be refunded the premiums that were paid after this actual date of death.

Exception in the Case of a Catastrophic Event

If a person goes missing as the result of a catastrophic event such as an airplane crash or flood, usually a beneficiary will not have to wait the designated time period before presumption of death can apply. Circumstantial evidence may be enough to state the date of the occurrence to be the date of death.

How to File a Death Benefit Claim

If the insured is not missing, filing a death benefit claim is relatively straight-forward.

Step One: If possible, contact the insurance agent who sold the policy or, if it is a group life policy, the employer who offered the coverage.

Step Two: Obtain a copy of the official death certificate and other documents.

Step Three: Complete a claim form from the insurance company.

Step Four: Submit the claim paperwork, IRS forms, and death certificate to the insurance company.

» Learn more: How to File a Life Insurance Claim

When starting the process of filing a life insurance claim, the best thing to do is get the agent who sold the policy involved in the process. He or she will be able to provide you with almost everything you need to know to file a claim. If the policy was purchased through Quotacy, contact us and we can help you through the process if you need assistance.

 
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About the writer

Headshot of Natasha Cornelius, a life insurance writer, for Quotacy, Inc.

Natasha Cornelius

Writer, Editor, and Co-host of Quotacy's Q&A Fridays

Natasha is the content manager and editor for Quotacy. She has been in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. When not at work, she's probably studying and working toward her Chartered Life Underwriter (CLU) designation while throwing a tennis ball for her pitbull mix, Emmett, or curled up on her couch watching Netflix. If it’s football season, the Packers game will be on. Connect with her on LinkedIn.