How to collect insurance benefits if a loved one is lost at sea

One of the questions I sometimes get from clients has to do with collecting various types of benefits when a loved one has been killed or lost at sea.

In particular, my clients sometimes want to know how they can collect private insurance benefits outside of any lawsuit or benefits received directly from an employer.

Collecting Private Insurance Benefits

In a wrongful death case under maritime law, various federal laws govern the legal rights and responsibilities of the employer and the beneficiaries or family members of deceased sailor. For instance, the Death on the High Seas Act and the Jones Act both provide legal rules and methods by which a family member can bring claims against the employer and other responsible parties for the death of a loved one. These legal benefits are separate and distinct from private insurance benefits.

Private insurance benefits can be rather complex. As an initial matter, a private insurance policy is a matter of private contract, meaning that the controlling rules will primarily come from the insurance contract itself. Different insurance contracts have different requirements, so your starting point when analyzing insurance benefits is always the insurance contract itself.

Beyond the contract, insurance contracts are usually governed by state and not federal law (unlike the Jones Act and the Death on the High Seas Act, which are governed by federal law). Most states regulate insurance companies and require insurance companies to promptly investigate and pay legitimate claims, or face stiff penalties for "bad faith" and breach of contract.

Other Insurance Benefits Issues

When a loved one is lost at sea, from time to time, because of the nature of maritime work and the fact that the ocean is an unforgiving environment, the body of your loved one may never be recovered.

How do you prove that your loved one is dead and not simply lost at sea?

Almost all life insurance companies require proof of death before benefits are paid out.

This situation can be more complicated than the usual situation in which death is proven beyond doubt and a death certificate is issued. When a body is recovered, a death certificate will be issued and you, the family member, simply present an official death certificate to the insurance company to start the process of collecting benefits.

In a situation where your loved one is lost at sea but no body has been recovered, it is more complicated. There are a couple of options, however.

Your options if a body is not recovered:

If you're a family member, you can seek to obtain a death certificate using a "declared death in absentia" proceeding.

The procedures vary from state to state and jurisdiction to jurisdiction. In most states and jurisdictions, there are legal mechanisms by which a surviving family member can obtain a death certificate by presenting overwhelming evidence that a person is not lost but in fact deceased. Factors such as the length of time a person has been missing, the circumstances surrounding the event that led to the person going missing, and other factors which tend to show convincingly that the person is almost certainly deceased. 

Because these situations are more complicated, it is usually a good idea to consult with a lawyer to walk the surviving family member or beneficiary through the process of obtaining a death certificate in absentia.

Can you pursue a legal case and get life insurance benefits?

Another question I get is whether life insurance or other insurance benefits can impact a surviving family members' ability to pursue a legal case while also collecting insurance benefits.

Usually, collecting insurance benefits will not impact a surviving family members' ability to pursue a legal case against any responsible parties. However, there are some instances where collecting insurance benefits may impact a deceased person's ability to pursue legal action. For example, if the insurance policy has language waiving the rights to pursue a legal case, or compelling private arbitration, then collecting insurance proceeds may have some impact on that person's right to pursue legal action later. It may also impact legal rights if the employer paid for all or part of the benefits.

Like the death in absentia issue, it is almost always a good idea for you, a family member, to consult with a lawyer before accepting any benefits that may impact their rights to pursue legal action later. Most lawyers will consult with people in these situations for free, so there really is no downside to talking to a lawyer.

Not only is there no downside, but there is a lot of upside because you, the surviving family member, can move forward confidentially, armed with information to make good choices for the surviving beneficiaries.

Want to know more? Schedule a free consultation with Mr. Beckcom by calling toll free 877.724.7800. Or, you can contact Mr. Beckcom by email at [email protected].

Brian Beckcom
Highest Possible 10/10 AVVO ranking. Husband. Father. Fisherman.