Task Force Tries to Ensure that Life Insurance Companies Pay Beneficiaries

Three companies have joined together to require insurers to regularly try to track down survivors of their
policyholders who have died. Insurance companies are failing to pay out all insurance policies of those who die because it is up to beneficiaries to come forward and claim their money when a policy holder dies.  People who do not know that a policyholder named them as a beneficiary would not know to come forward and claim their award.  

State officials found that life insurers have failed to pay over $1 billion in death benefits over the decades.  An industry official did not argue with this figure, but he did note that it is a small percentage of the total claims filed. 

A multistate task force is investigating several life insurance companies including MetLife Inc., AIG Inc., and Lincoln National Corp., among others.  A settlement should be reached shortly.  In addition to this task force, led by Florida insurance commissioner, New York’s Department of Financial Services ordered insurers to check their policyholder names against a death database.

Over the years, many of the insurance companies have made good faith efforts to try and track down beneficiaries of policyholders who died.  The task force has deemed some of these efforts insufficient, and is working to push insurance companies to do more. 

See Leslie Scism, Life Insurers Pressed on Lost Policies, The Wall Street Journal, Aug. 12, 2012. 

Special thanks to Brian J. Cohan (Attorney, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.