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

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 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.


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