What to do about life insurance proceeds erroneously paid out?

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What to do about life insurance proceeds erroneously paid out?

My wife was notified by an insurer that she was a beneficiary of her uncle’s life insurance policy. She filed the paper work and it set up her account and sent her checks we wrote a check for the full amount and it cleared into out bank account over a month ago. Now it i saying that she is actually not a beneficiary and it wants the money returned. Do we really have to pay this back? What should we do?

Asked on May 7, 2012 under Insurance Law, Michigan

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, I think that you really may have to give it back.  I would ask the insurance company to give you a full explanation, in writing, as to what happened as well as a copy of the policy.  Then I would speak with a lawyer once you have the documentation.  Do not spend it until you get the full story and explanation.  Just in case.  Good luck.


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