Am I legally liable to pay back an overpayment received from an life insurance company?

My mother passed about 6 months ago.Her life insurance policy was $75,000 and was split between my 4 siblings and myself. Then, 2 months after receiving our dividends, the insurance company sent us each a letter about an overpayment they mistakenly gave us. It stated that our mother has filed for an accelerated life expectancy payment which brought the policy down to around $56,000 that should have been split to each of us. They are requesting that we each pay $3750 back to the insurance, stating that if we do not pay they will proceed with filing for lawful enrichment. Are we lawfully required to return payment on their clerical error?

Asked on September 30, 2019 under Insurance Law, Texas

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

Yes, you are required to return the amount of the overpayment. The law does not condone "unjust enrichment" which is what this would be if you do no repay the money that you were mistakenly given. And think about it, had you been accidentally underpaid, you would expect the law to be on your side.

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

Yes, you are required to return the amount of the overpayment. The law does not condone "unjust enrichment" which is what this would be if you do no repay the money that you were mistakenly given. And think about it, had you been accidentally underpaid, you would expect the law to be on your side. 


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