You would think that in this day of modern technology and search engines plus the databases available on the web that people would be receiving their money if they are a beneficiary of life insurance. The sad news is that they don’t always get their money and it happens a lot.
Recently, Consumer Reports recently completed a detailed investigation concerning the big problem in the the issue for February. The study and reports confirm that there is around $1 billion that has not been claimed yet and waiting for the beneficiaries to claim the insurance.
Senior Editor, Jeff Blyskal said that the normal amount for unclaimed life insurance is around $2,000. However, there have been some cases where the payouts might even reach all the way up to $300,000 or more.
Consumer Reports went on to further say that now the odds are calculated and there is a chance of around one 1 to 600 people might not know that they have unclaimed life insurance.
Why Is This Even A Problem?
Often times when something like this happens it is all caused from lack of communication. Sometimes people will buy life insurance and might not let the other beneficiary know that they have purchased the insurance. However, the finger gets more pointed towards the insurance industries by Consumer Reports.
Blyskal also stated that the companies don’t seem to be making much effort to locate the people that should be getting the money. If the policyholder dies they don’t always seek out the beneficiaries.
Back in 2011 New York State finally started to look into the situation and how the claims are being handled from the insurance company. Governor Andrew Cuomo talked about the investigation that the state did and recently announced that over $665 million is getting paid to around 89,000 people around the USA.
In the statement from Gov. Cuomo he said that it’s only fair that the individuals and the families receive their benefits from the life insurance because they are entitled to receive them.
The findings in New York go hand in hand with what the regulators in California also discovered with the audits. They went back to the year 2008 and found out that there is a wide industry practice of beneficiaries not receiving their benefits after a person has died despite the fact that all companies have access to the federal death records. In a few cases the payment was actually withheld even though the company had direct confirmation coming from the relative that the policyholder died.
The Good News Is Insurance Companies Agreed With Changing The Way They Handle Things
Six major insurance companies decided to settle with the charges which was brought to them by the multi state task force because of the problem occurring with the payouts.
Companies such as NetLife, Forethought, AIG, Prudential, Nationwide and John Hancock agreed with being able to use the file on the Social Security Administration’s Death Master File in order to help with being able to locate the beneficiaries. If a beneficiary is unlocatable or cannot be found then the payouts will go to the property office of the state as unclaimed.
How To Collect and Locate Missing Unpaid Life Insurance Benefit
If you think that you might have been one of the beneficiaries to someone that has died then you can visit missingmoney.com and research the records for at least 38 states and you can also research Puetro Rico, Canada and the District of Columbia to see if you have unclaimed money.
Another way with finding out information is with visiting the American Council on Life Insurance and research on the website that they have to see about collecting money.
The best way to avoid unclaimed life insurance money is always with having communication with one another and letting someone else know when they have been made a beneficiary.