Will I have to repay an overpaid benefit amount by the life insurance company?

UPDATED: Sep 30, 2022

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Will I have to repay an overpaid benefit amount by the life insurance company?

I was a beneficiary on my grandmother’s life insurance policy. After she passed

away I sent in paperwork I had gotten from the executor of the estate to get a

lumpsum of the policy. I called the insurance company multiple times to get more information on amounts in the policy, etc. and they refused to give information. I received a check for an amount which was supposed to be a lump sum of my share of the policy about 2-3 months ago. About 3 weeks ago, I received a second check for a lesser amount. Then, 2 days ago, I received a letter stating that the first check was for an incorrect amount and that it will need to be repaid as it was an overpayment. I need to know if I will have to repay this

Asked on March 22, 2016 under Insurance Law, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Yes, you will have to repay the overpayment (the 1st check). An error does not entitle you you to keep money--the law is very definite about that. Just as if you accidentally double paid for an online shoppjng order or a contractor's services, they'd have to return your overpayment, so do you have to return the insurer's overpayment. The fact that you had no idea that it was an overpayment or that you have innocently used the money does not matter--that does not give you any rights to the money. You should probably focus on trying to work out a payment plan or schedule with the insurer which you can afford.

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