When a life insurance policy pays out more than the total cost of services, your funeral home may need to distribute the excess funds - also called an overage - back to the family. Gather allows you to handle this gracefully by recording the overage and distributing it as a refund to the correct family member, without disrupting your accounting or leaving an unexplained balance.
🤔 Why Would I Need to Record an Insurance Overage?
Let’s say the funeral services cost $7,500, but the insurance payout was $8,000. You now have an extra $500 that needs to be returned to the family. That money may need to be distributed to:
A family member directly
An estate
A secondary payer
If not recorded properly, this overage can cause confusion in your reporting, leave a phantom outstanding balance, or complicate year-end reconciliation.
Gather gives you a clean and auditable way to:
Track the full insurance payout
Distribute overages to the right party
Maintain accurate statement balances and case values
See this example of a $7,000 payout for a statement that was only $5,000. Then see how we refunded the overage of $2,000 to the family, bringing the case outstanding to $0.
🧾 How to Record and Distribute Insurance Overage Payments in Gather
Follow these steps to properly record and refund an insurance overage:
1. Create a Payer Card for the Insurance Company
From the case page, create a new payer card labeled clearly for the insurance provider (e.g., “Mutual of Omaha”).
2. Record the Full Insurance Payment
Enter the total amount received from the insurance payout — even if it's more than the total balance of the statement.
This will cause the case’s outstanding balance to drop below $0, reflecting the overpayment.
3. Add the Family Member Receiving the Refund
Click “Add New Payer” and create a payer card for the family member who should receive the extra funds.
💡 If this person already has a payer card (e.g., if they previously made a payment), you can reuse it to refund the overage.
4. Click “Refund” Instead of “Collect”
On the family member’s payer card, click the “Refund” button. This tells Gather you’re returning funds to this person, not collecting from them.
Gather will prompt you to select a refund method (Cash, Check, or Other).
🛑 Important: You cannot issue the refund back to an online method (e.g., card or ACH) unless the payer made an original online payment. In most insurance refund scenarios, this will need to be recorded as an offline refund.
5. Enter the Overage Amount
In the refund dialog, enter the exact overage amount you are returning to the family member. For example, enter $500 if that’s what was overpaid.
Choose a refund method (e.g., Check), then click Start Refund and complete the transaction.
6. Record the Refund
Finish recording the refund. Once done, the overage will be properly distributed and accounted for.
The case’s Outstanding Balance will return to $0, reflecting that no further action is needed.
✅ Why This Process Helps
Keeps your statement clean: No extra charges, no incorrect outstanding balances.
Tracks where the overage went: All distributions are recorded with names, amounts, and methods.
Prevents confusion for families: No awkward calls later asking why the payout was short or unaccounted for.
Supports audit-readiness: You can trace the full journey of the insurance payout and its final distribution.
🧠 Common Questions
Can I refund the insurance overage to more than one family member?
Yes. You can create separate payer cards for each recipient and issue individual refunds based on how you want to split the overage.
Can I use this method for any type of overpayment?
Yes - although this workflow is ideal for insurance-related overages, it can also be used to distribute overpayments from any payer that exceed the statement total.
💬 Still Have Questions?
If you’re unsure how to handle a specific payout or want help setting up your overage flow, reach out to our support team. We’re happy to walk you through it step-by-step.