Insurers Stepping Up Efforts to Find Life Insurance Beneficiaries

Beneficiaries of forgotten life insurance policies aresuddenly beginning to receive checks in the mail.  What might seem to many like a scam isactually an increased effort by major life insurers to determine ifpolicyholders have died and to locate their beneficiaries. 

In response to an investigation, Nationwide started thistrend by striking a $7.2 million deal with seven states regarding enormousamounts of money in unclaimed benefits. Other insurers like Metlife, Prudential, and John Hancock have followedsuit with similar agreements.

Life insurance policies generally require the beneficiariesto notify the insurer when the policyholder dies, but the new agreements haveinsurers take more initiative to find beneficiaries.  Nationwide has since paid out about 3,000 ofthe 4,000 old policies they had identified. The average benefit is around $2,000.

See Mark Williams,Insurers Finding Beneficiaries ofForgotten Life Insurance Policies, The Columbus Dispatch, May 26, 2013.