According to the February 2013 issue of Consumer Reports, there is currently about $1Billion in life insurance benefits waiting to be claimed by beneficiaries
The cause for the unclaimed life insurance benefits usually is due to a communication problem. People buy a life insurance policy, and then, for reasons too long to list, they don’t tell the beneficiaries. But, in this case, there may also be a much simpler communication breakdown…..the insurance company may not be in a rush to let the beneficiaries know when a policy holder dies.
The States have started programs to look into what could be referred to as an industry-wide practice of failing to pay death benefits if not prompted to do so. There is also concern that after death life insurance premiums are being taken by insurance companies in these type cases until the value of the policy is depleted.
A number of larger insurance companies have settled charges brought against them related to the payout problem. The settlement agreement includes a requirement that the beneficiary life insurance payouts be turned over to state unclaimed property officers so that they can be returned to The Rightful Owner.
But, in the long run it still comes down to communication. Searching for life insurance benefit payouts wouldn’t be required if the person who takes out a life insurance policy would tell the beneficiary about it. The beneficiary doesn’t need to know how much they may be in line to receive in death benefits, but at least they would know to look.
To search for a potential unclaimed life insurance benefit payout (Click here), first search under the name of possible beneficiaries in know states of residence. If nothing comes up, then try the name of the deceased in the states where they have lived, they may have taken out the policy without listing a beneficiary, in which case it would belong to their estate.