Could new missing person law open up life insurance fraud?

A new ruling by the Ministry of Justice could make a huge difference to the difficulties some families have in tying up financial loose ends in the event of the death of a relative, but there are also fear the changes could create more insurance fraud.

The ministry have announced that from next year they will be able to produce an official ‘presumed dead’ certificate, which will carry the same weight as an actual death certificate, for people who have gone missing for a set period of time.

The certificate looks set to be accepted by life insurance providers, as well as banks and building societies, and the process could make things a lot easier for families of missing people who currently struggle.

The process in existence at the moment for sorting out the affairs of people who have been missing for a long period of time is very complicated and long winded, so the new presumed dead certificate will make a large difference. The current process sees someone having to be missing for seven years before the courts will act, whilst the new certificates cut that waiting time to just four years.

Jonathan Djanogly, the current justice minister explained, “We recognise the emotional rollercoaster faced by families who are left behind.

“The changes we are announcing today will ensure that there is a law in place that provides a simple legal framework by which families of missing people can receive the appropriate guidance and tackle the problems they face in a straightforward way.”

Whilst the changes were welcomed by MPs and charities, the insurance companies are expected to be less than thrilled, as the door could open up to further fraud.

Based on current numbers only around 40 certificates will be produced a year, and over 99% of the 200,000 Britons reported missing every year will turn up within 12 months.

A statement from the ABI explained, “The combination of an increasingly difficult economic climate, combined with increasingly fluid travel habits, may result in ‘going missing’ becoming more common if access to insurance funds without a body becomes easier.”

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