I’ve been writing this diary for a few months now. Each of the situations I’ve come across, while not always straightforward, are fairly commonplace and many benefits consultants will deal with such situations at some time or another.
Today was different.
I found out about a situation which no benefits consultant would want to deal with, but some will have to in the course of their career - the death of an employee, with no body and therefore, no death certificate.
A colleague had been dealing with a company where an employee had gone on their honeymoon to some exotic destination. He told me that during the honeymoon the employee had decided to hire a light aircraft to travel to another island. For whatever reason, the wife had decided not to go.
Unfortunately, the plane never arrived, and it soon became clear it had come down at sea but no plane or body was found. The wife was left dealing with everything but had to return to the UK without her husband’s body and no death certificate.
The big question for the employee’s company was, would the life insurance pay out to help this poor lady who was left with no husband, no income and possibly no life insurance?
Well the answer is no. Without proof of death, insurers can’t pay out. There was no way for the company to help this lady as their hands are tied by this rule. Companies can’t just do unauthorised insurance pay outs, as this has huge tax implications.
This is one of the most challenging situations any employee benefits consultant will find themselves in. Having to deal with someone grieving who expects to get the life insurance, only to be told they can’t.
This is truly devastating news to deliver and one which most consultants would dread, even those with years of experience (like me).
Luckily in this case the body of the employee was washed up a few weeks later. A death certificate was issued, and the spouse received the life insurance in the end but it was a very worrying and upsetting time for all concerned.
The issue here, and what can make insurers suspicious in similar claims, is that the wife didn’t go on the plane. They had no way of knowing if the employee had simply decided to hire the plane and parachute off, only to reappear at a later date after the insurance had been claimed.
It does happen. Remember the case of the Canoe Widow? Insurers therefore have tightened up their rules.
Also because the plane wasn’t a charter or scheduled flight, just a hired light aircraft there was no passenger list. If a plane comes down from a major airline – even if a body isn’t found, claims are usually met because they know who was on the plane.
So the moral of the story is if you have a death, you really need a body and a death certificate if you want a smooth claim process. If not it’s guaranteed to be tricky and difficult to resolve.
Companies will need to communicate with the spouse and family in extremely difficult circumstances. This is when you really need a good quality advisor by your side.