Investigation Finds Millions in Unclaimed Life Insurance Benefits
The New York State Department of Financial Services recently uncovered $262.2 million in unpaid life insurance benefit for nearly 33,000 people nationwide. The unpaid benefit money was a result of life insurance beneficiaries either forgetting to file a claim after a loved one died, or simply not knowing the life insurance policy existed at all.
During the investigation, authorities found that although life insurance companies receive a list of recent deaths from the Social Security Administration, they are not required to determine if anyone on that list was a policyholder. This has resulted in thousands of unpaid cases across the country. State insurance departments are working to issue a regulation that would require insurance companies to cross check records and notify families of unpaid benefits.
Making Sure You Get Paid
Whether the regulation goes through or not, it will always be the responsibility of the beneficiary to file a claim when that day comes. The best way to ensure your life insurance policy pays out when it is supposed to is to have an open line of communication with your family, or at the very least, with your beneficiary. It can be an uncomfortable conversation, but they needs to know how to file a claim when that day comes. Here are some other ideas for you to consider:
- Use a Family Info Guide: We use the Family Info Guide with many of our clients because it is a simple way to keep all your important information in one place. It’s a one-sided form that you fill out with all your personal information and then distribute to your family and beneficiaries. That way your family has all the information they need (including any life insurance policies) right in front of them when they'll need it. Use the Request Info button and we'd be happy to send you one.
- Involve Your Beneficiary: When you make your beneficiary part of the process of buying life insurance, you not only make them aware of the policy, but you open the door to a lot of healthy conversation that usually stems from these types of discussions. Our agents make it a habit to meet with our client’s beneficiary whenever possible.
- Review Bank Statements: If a loved one recently died and you are unsure if they had a life insurance policy, check their old bank statements to see if they made regular monthly payments that might have been life insurance premium.
Steps are being taken to make sure that future life insurance polices won’t go unpaid, but it’s still a good idea to use some of these suggestions to make sure your policy isn’t forgotten. As always, were here to answer any questions you may have whether it be about a new or current life insurance policy. Feel free to call our office or use our Request Info button and reach out to us that way. We'd be more than happy to help.