Probing For Missing Death Benefits

An estimated one billion dollars worth of death benefits is sitting on life insurer’s books.  State regulators, comptrollers, and some attorneys have begun probing to discover whether these insurers have violated laws when it comes to paying these benefits. Over the past nine months, state regulators and attorneys have begun looking into the possibility that insurers use a Social Security death database to stop retirement-income checks of annuity owners but fail to use the database to determine if the policyholders are still living or whether death benefits should be paid.

As a result of this probing, more insurers are using the database in their life insurance units, and a portion of the $1 billion in death benefits is now accounted for. Many insurers, including MetLife Inc., have programs in place that will help potential beneficiaries search for policies sold in their state. Other insurers, like New York Life Insurance Co, now routinely check their entire policyholder list against the Social Security database to help ensure death benefits are paid out.

To help determine whether they are owed death benefits, potential beneficiaries should consider checking the mail of the insured for up to one year after the death for premium notices.  Potential beneficiaries should also review old income-tax returns for income from or interest expenses paid to life insurance companies.  Additionally, beneficiaries can contact insurers directly, though having the insured’s full name, maiden name, Social Security number, address, date of birth, and date of death will likely help the process run more smoothly.

See Leslie Scism,  Are You Owed Life Insurance?, The Wall Street Journal, Dec. 31, 2011.

Special thanks to Jim Hillhouse (Professional Legal Marketing, PLM Inc.) for bringing this article to my attention.