Some Life Insurers Agree to Seek Out Beneficiaries of Unpaid Policies, and More May Soon Do SoHome
Some Life Insurers Agree to Seek Out Beneficiaries of Unpaid Policies, and More May Soon Do So
By Martha Neil
Aug 13, 2012, 10:53 pm CDT
Life insurance policies require beneficiaries to make a claim to collect the money that is due to them, and for more than a century that is the only way benefits generally got paid.
But that practice is changing, due in part to the ease of using computerized technology to cross-check the names of policyholders against death databases. Now, at least three insurers have agreed to change their procedures and try to track down beneficiaries, and more are considering doing so, in response to pressure from a multistate task force led by Florida’s insurance commissioner and a separate effort in New York, the Wall Street Journal (sub. req.) reported in a front-page story Monday.
Over the years, this adds up to well over $1 billion in unpaid life insurance, some contend, and insurers aren’t necessarily disputing that figure. However, companies say the percentage of unpaid policies is small.
Nonetheless, says Bruce Ferguson of the American Council of Life Insurers, “We know the percentages represent real people, and we’ve been working with policymakers on ways to ensure all policyholders get the benefits they deserve.”