The major events of recent years, particularly in South Africa, including the 2021 July civil unrest and 2022 Durban floods, have brought forth an issue that is not often entertained due to the rarity of such events, and that is whether it is possible to claim under a life policy where the deceased's body is missing. Few months after the Durban floods, there were reports of fraudulent insurance claims under life policies – believed to be prompted by the fact that most bodies went missing. In addition to the aforementioned catastrophic events, bodies may also go missing in circumstances of a kidnapping, human-trafficking, abduction, etc. It is, therefore, opportune, and necessary to delve in this topic. Since there is no concrete proof of death, a missing human body has serious and far-reaching legal implications for the concerned family. For example, what happens to the marriage (if applicable); estate; legal duties, etc. These are some of the difficulties that come to the fore under such circumstances. This legal piece, consequently, briefly explicates what the legal position is in this regard and how the law caters for such instances.
How claims under life insurance policies are ordinarily dealt with?
There is no one prescribed and uniform manner of dealing with claims under life insurance policies, as long as the policy terms, conditions and claiming procedures are within the legal parameters. Insurance houses enjoy great latitude in determining terms, conditions and claiming procedures. The policy wording would ordinarily delineate the terms and conditions relating to the claiming process. It would also depict any applicable standard exclusions, for example, the policy may state that there will be no payout in cases of suicide or unnatural death, etc. Insurance companies usually require an autopsy report to verify the cause of death, and to ensure that the cause of death does not fall within the exclusions.
Claiming under life insurance policies where the body is missing.
It goes without saying that where there is no body to examine, there can be no post-mortem report, and the insurer is likely to dispute any claim that may be brought under the relevant policy. In some instances, there may be strong indications that the policyholder has passed on, however, without any concrete proof of death, there remains a possibility that the policyholder is still alive. This, naturally, places both the policy beneficiaries and the insurer in a difficult position. In realisation of such dilemmas, the law caters for such instances by allowing family members, beneficiaries, creditors, or any interested person to bring an application to court for a presumption of death order. For the present purposes, it would be inapt to explain the process of obtaining such an order. Worthy to mention is that the courts do not make such orders lightly, and there are several factors that are considered including, inter alia, one's age, risks associated with one's occupation, likelihood of having been involved in an accident or killed in a disaster, one's general lifestyle, period of absence, etc. Once the court has issued a final order for presumption of death, most of the other consequences of death usually unfold (with a few exceptions such as dissolution of marriage – which the court cannot, on its own accord, do). In light thereof, the beneficiaries can proceed to claim under the life insurance policy once this order has been issued. Due to the fact that there is no irrebuttable proof that the absent person is indeed deceased, the law allows the heirs and other beneficiaries of the deceased estate to take what rightfully belongs to them on condition that they provide security for repayment of the amount should the missing person return (see Dempers and Van Ryneveld v SA Mutual Life Assurance Society (1908). Further, the above route of obtaining a presumption of death order is in terms of the common law. There are alternatives to this route in the form of legislation i.e, Inquests Act and Aviation Act. Considering that the common law route is the most used route, it would be inapt to delve deeper into the abovementioned pieces of legislation. It suffices, however, to mention that it is possible to obtain an order with similar legal effects as the common law presumption of death order – using the route of the mentioned legislation.
Whilst insurance companies must investigate claims and take necessary precautions to guard against fraudulent claims, the rightful beneficiaries need to ensure that they take the necessary steps to get all the benefits that they are entitled to in terms of the policy.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.