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Life insurance payouts and slayer statutes add to family’s burden p3

Thu Jun 5th, 2014 on     Insurance Claims,    

We are discussing a court decision about life insurance policy payouts under unusual circumstances. Generally, the insurance company pays the beneficiary as soon as it learns of the insured’s death. If the company cannot locate the beneficiary, it retains the payout for a set period of time before turning it over to the state. Florida has been instrumental in holding life insurance companies’ feet to the fire, so to speak, to make sure they actively search for the beneficiary.

The case of Susan and Josh Powell is not that easy. A few facts complicate the matter. First, Susan Powell has been missing since 2009. Second, police suspected Josh Powell had murdered Susan but were never able to prove anything. Third, the state’s slayer statute would have prohibited Josh from collecting the payout from Susan’s policy if he had been convicted of her murder, but, fourth, Josh killed himself and the couple’s two sons before he filed a claim.

The first policy here, however, is not Susan’s; it is Josh’s. He had a $1 million policy that apparently listed Susan and his three siblings as beneficiaries. The court was asked to decide if the presumed killer’s family could benefit from his own insurance policy.

The court said yes, the family can benefit. The slayer statute does not extend to members of the killer’s family. Even if Josh Powell is ultimately determined to be Susan’s killer, his family is not to be penalized for his crime.

The payout, then, will be split 50-50 between the families. But that’s just one of the insurance policies. There are more. We’ll finish this up in our next post.

Source: Deseret News, “Judge orders Josh Powell life insurance money be split 50-50,” Pat Reavy, May 19, 2014

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