Unclaimed Property: Who Tracks Down Beneficiaries of Life Insurance Policies?

The debate about what insurance companies should do to find beneficiaries of life insurance policies has been ongoing for a long time.

According to Oklahoma State Treasurer Ken Miller, even though 99 percent of life insurance policies are claimed by beneficiaries, the one percent of unclaimed funds amounts to billions of dollars across the United States.[1]

If a policy exists and the beneficiary knows about it, he or she will file a claim in order to get paid. If, however, the policy exists, but the beneficiary does not know about it, the insurance company can claim it does not have to pay.

In the past, insurance companies did not have to pay unless a claim was filed. This trend is changing now, when many state regulators demand stringent reporting from the life insurance industry.

But the changes will not be visible soon. It may take years to distribute unclaimed money to all life insurance beneficiaries who are not aware they are owed payouts.

(more…)

Life Insurance Coverage Now Available To Breast Cancer Survivors

October 2014 is breast cancer awareness month. It has brought a more focused approach to raising money for improving treatment, prevention and finding cure for breast cancer.

The cause raised billions of dollars that helped many people survive this disease. Chances of long-term survival of breast cancer survivors are much greater now and many of them apply and get approved for life insurance. Breast cancer survivors’ long-term survival chances now get calculated and priced.

Life insurance coverage for breast cancer survivors has not been popular in the past, but with the new developments in treatment of the once deadly disease, more and more people qualify for affordable life insurance coverage. The main factors insurance companies are looking at are: the time period during which the applicant had cancer and the stage it was in.

(more…)

Statutes Automatically Revoke Beneficiary Designations on Life Insurance Policies

A life insurance beneficiary designation is a document which names an individual who will receive the proceeds of a life insurance policy in the event of death.

All applicants for life insurance coverage are asked to name a primary beneficiary (an individual who will receive benefits after the insured’s death) and a contingent beneficiary (an individual who will receive benefits if the primary beneficiary is not available). It is common for people to name their loves ones as beneficiaries on their life insurance policies.

It is also common for people to forget to update beneficiary nominations after they purchase the policy. Many of us go through life without thinking about death and life insurance policies.

As a consequence, we have major life changes that may influence our earlier choice of beneficiaries, but we forget to actually update the policy. We may no longer wish for our ex spouse to receive our benefits, but unless we officially change the beneficiary on file with the insurance company, the ex spouse will get the proceeds after our death. This is how it works.

(more…)

Understanding Life Insurance Terms

As any legal document, a life insurance policy is full of terms the meaning of which is often difficult to understand. Essentially, a life insurance policy is a contract which has terms required by law and provisions that protect the insurance company.

While many policies have an extensive “definitions” section where you can look up important terms, some policies do not cover all confusing terms. Here are some insurance terms that are used throughout a policy that have special meaning and may help you get a better understanding of your contract:

(more…)

Millions Recovered for Pennsylvania Life Insurance Beneficiaries by the State Insurance Department

Pennsylvania Insurance Department has concluded several multi-state investigations aimed at the business practices of the life insurance industry. As a result of the investigations, several major life insurance companies entered into settlement agreements with the state Insurance Department to pay more than $174 million in life insurance claim payments to 11,000 beneficiaries and policyowners residing in Pennsylvania.

According to the state Insurance Commissioner, the goal of the investigation was to make sure life insurance companies reform the way they do business for the benefit of beneficiaries and policyowners.

The main focus of the investigation was the life insurance industry’s selective use of the Social Security Administration’s Death Master File (DMF).

(more…)

Three Life Insurance Mistakes That You Can Avoid Now

People buy life insurance for various reasons, but the most common one is income replacement. Life insurance money may be used to pay the mortgage, living expenses, college tuition, etc.

Buying a policy is not all you need to do to plan for the financial future of your loves ones in the event of your death. In other words, you cannot buy a policy, put in in your desk drawer and forget about it.

Below we will describe three most common mistakes people make about life insurance and how to avoid them now.

(more…)