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Beneficiaries to Life Insurance Policies


  12:12:38 pm, by Unclaimed Money Guru   , 461 words  
Categories: FoundMoney Blog

Beneficiaries to Life Insurance Policies

There have been recent changes on the requirements for Life Insurance companies to notify beneificiaries of death benifits that are due to them. In the past, their was no real enforcement by the Governments for Life Insurance companies to notify a benificiary that they are entitled to proceeds of a policy. Due to recent class action law suits against Life Insurance Companies, there are now regulations in place that require these companies to be proactive in locating benefiaiciares of policies, they must take affirmative steps to locate beneficiaries and pay valid claims.

Six states enacted legislation requiring life insurers to perform periodic matching of in force policies against a death master file. These laws also apply to annuity contracts and retained asset accounts. The six states are; Alabama, Maryland, Montana, New Mexico, New York, North Dakota.

The law that requires Life Insurance Companies to notified of a beneficiary of a policyholder’s death, was often lax, according to many government officials. Florida’s Insurance Commissioner, says that the “failure to search for beneficiaries even though the company has access to death information is a pervasive industry practice.”

In the past few years, several major companies, including Prudential and MetLife, have signed agreements with state regulators, paying penalties and promising to do better.

While most insurance companies are voluntarily compling with these new regulations, that have not been mandated by a State, some are not for various reasons.

A class action lawsuit commenced against the John Hancock Life Insurance Company was recently dismissed by a federal district court in Massachusetts. The court ruled that John Hancock Life Insurance was not obligated to check the Social Security Death Master File for deceased policy holders before handing the unclaimed insurance proceeds to the States.

The court based their decision on the “established principles of insurance law.” According to the court the plaintiff was unable to prove that John Hancock Life Insurance Co. violated the “fundamental principles of justice, equity and good conscience.”

Unless a beneficiary knows, that such a Life Insurance Company is holding a policy naming them as a beneficiary, there is efficient why of finding this information out.

There are many ways to check on Life Insurance Policies but they are time consuming and not aways accurate. You can check the files of a deceased person and look for any correspondence from an insurance company or evidence of checks written for payments. You can check old tax returns. You can check the mail to see if payments were still being made on the policy. You can ask employers or unions. You can also call all Life Insurance Companies in your area and hope that none were missed. Last but not least you can contact the State Unclaimed Property Office in your State.

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