Can an insurance company demand the refund of an overpayment of death benefits 5 years after the death of the insured?

UPDATED: Sep 29, 2022

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Can an insurance company demand the refund of an overpayment of death benefits 5 years after the death of the insured?

It was a $5000 group life policy through an employer. The insurance company says only 65% was supposed to be paid out.

Asked on October 31, 2015 under Insurance Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

They *may* be able to demand the repayment. First, as a general proposition, if you are overpaid by someone, an insurer or otherwise, they are entitled to the money back: an error or mistake does not create any right to keep the overpayment. 
The question is, are they in time to seek the return of the money? The statute of limitations is the time within which to initiate a lawsuit; once that time passes, you can no longer be sued. Once you can't be sued, while they can "ask" for the money (anyone can ask for anything), they would have no way to compel you to pay if you chose to not do so. 
Their claim for the money would arise from the insurance policy, which is a contract, so the statute of limiations would be that for breach of contract--or five years. Alternately, they could try to claim that you "stole" the money and bring a claim for conversion or theft, but the statutes of limitations to sue for that is again, no more than 5 years. You write that the death was 5 years ago. If you were *paid* more than 5 years ago, it may be too late for them to take legal action to recover the money, but if 5 years have not yet gone by, they most likely can take legal action still.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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