Millions of dollars in life insurance benefits go unclaimed by beneficiaries who cannot find their deceased loved ones’ policies or, in some cases, may not even know the policies exist. If you really think about it, that is not surprising at all.
How many individuals purchase a life insurance policy and forget to tell the beneficiary that it exists and where to find the policy when they pass? Or perhaps the individual lost the beneficiary spouse and failed to change the policy or notify the alternate. With advanced age often comes some form of dementia or diminished memory capacity. The list is endless. We know it happens.
Unprepared Beneficiaries Let Benefits Go Unclaimed
The National Association of Insurance Commissioners has led the way to address this issue of beneficiaries being either unprepared to follow through on claims or are entirely in the dark about being a beneficiary in the first place. The NAIC published a survey in January 2020 that revealed that many life insurance beneficiaries are unprepared to be a beneficiary. Only 39% of Baby Boomers were prepared and that was good in comparison to 30% of Millennials and 22% on Generation Z beneficiaries. No wonder life insurance benefits go unclaimed!
A Means to Locate Benefits So They Can Be Claimed
As part of its role in educating consumers about insurance, the NAIC developed a Life Insurance Policy Locator tool which has helped consumers claim more than $765 million in benefits since its introduction in 2016. It’s free to use, available online and gives everyone in the United States access to insurer databases, eliminating the need to contact multiple companies or multiple agents to find a policy, or identify whether or not there is a policy. The tool conducts a search of all participating life insurance and annuity companies regardless of the prior state of residency of the deceased. The online policy locator requests are secure, confidential, and free.
Consumers can begin searches with just a little information, such as a certified death certificate so there is no excuse when life insurance benefits go unclaimed.
Since its inception in 2016, the national Life Insurance Locator Service has received 227,551 requests nationwide, which has led to 81,349 matches of life insurance policies or annuities with nationwide claim amounts of $1,028,479,262 being reported by companies through July 31, 2020.
Over $7.4 Million Located for Tennesseans in First Six Months of 2020
Through Life Insurance Policy Locator Service over $7.4 million in claim amounts of life insurance benefits or annuities have been located for Tennesseans in the first six months of 2020 via the Life Insurance Policy Locator Service. In Tennessee, 913 requests had been made in the first half of 2020 resulting in the location of $7,435,665 in claims or annuities — a 34% increase since an earlier report this year.
What You Can Do
- If you have named a beneficiary for your life insurance, tell that person both in person and in writing.
- Prepare a list of life insurance policies and the beneficiary for each. Make several copies. Keep one with important papers. Give one to the person who is the named executor of your estate. And make sure one copy is with your family attorney.
- Just as with all other estate and end of life issues, talk about it with your loved ones.