Life Quotes, Inc. Asks Life Insurance and Missing Persons: When Can The Family Expect A Payout?

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Jul 18, 2011, 05:30 ET

DARIEN, Ill., July 18, 2011 /PRNewswire/ -- The National Crime Information Center (NCIC) reported in 2010, that there were approximately 692,944 missing persons in the NCIC database. NCIC statistics estimate that 19,858 of those cases are victims of kidnapping or abduction and 381 went missing due to a natural disaster.

While having a loved one disappear can be a horrifying and traumatic experience for family and friends, what happens if years go by and their loved one is never found? What are the life insurance implications especially if the missing person was the policyholder? Insurance experts say that before a payout can be made, a coroner has to declare the person deceased. This means that it has to be proven to the insurer that the person without a shadow of a doubt has died and this can be much more difficult than it sounds. Life insurers are always on the lookout for fraud and foul play in these cases.

The situation becomes complicated when a body has not been found. In most states, the ruling "death by absentia" or "presumption of death" has to be decided in court. But Whit Cornman, spokesperson for the American Council of Life Insurers, says that generally the timeline for a missing person to be declared "legally" dead differs by state, but it's typically four to seven years.

Life Quotes, Inc. highlights the following key points when it comes to life insurance and missing persons:

Filing a missing persons report with the local authorities is mandatory when it comes to finding a missing loved one. The faster you file a report, the faster an investigation into their disappearance can be launched. In the case of foul play, time is essential.
Loved ones and beneficiaries can file a petition with the courts to have the missing person declared dead. Some states will only declare that a missing person is dead if a reasonable search and investigation was carried out to find them. This criterion varies by state.
A payout can only be given to the family by court order. But if the proper evidence is provided to the courts then the proceeds can be expedited faster to the family.
In the case of natural disaster, the beneficiary would need to file a "proof of death" form through an insurance agent, complete the form and submit it to the insurer so the proceeds can be released to the family.
If the missing person is declared dead and his or her assets are distributed to family members, including the proceeds from a life insurance policy, and they return alive, all assets and proceeds have to be given back to them. But this also varies by state. In some states after a certain amount of time has gone by, permanent ownership of the missing person's assets is given to the family and it cannot be disputed if the person reappears.
In most cases, the circumstances of the case determine whether the person is presumed dead. In other words, if the person was running from the law, has no familial ties or was in an abusive relationship where creating a new identity was required for their protection, a court may hold off on presuming them dead.

For more on life insurance and missing persons, see "Life Insurance and Missing Persons: When Can The Family Expect A Payout?" http://www.lifequotes.com/articles/life-insurance-and-missing-persons-when-can-the-family-expect-a-payout/

About Life Quotes, Inc.

Originally founded in 1984 as Quotesmith Corporation, Life Quotes, Inc. owns and operates a comprehensive consumer information service and companion insurance brokerage service that caters to the needs of self-directed insurance shoppers. Visitors to the Company's Web site www.lifequotes.com, are able to obtain free, instant car insurance quotes, instant life insurance quotes, home, business and health insurance quotes from leading insurers and have the freedom to buy online or by phone from any company shown. Life Quotes, Inc. generates revenues from receipt of industry-standard commissions, including back-end bonus commissions and volume-based contingent bonus commissions that are paid by participating insurance companies. We also generate revenues from the sale of Web site traffic and insurance leads to various third parties.

SOURCE Life Quotes, Inc.