Recently, several leading insurance companies agreed to amulti-state settlement where the companies will be paying out $763 million owedmany deceased’s heirs. As part of the agreement the companies are reformingtheir practices, but denying any culpability. The insurance companies continuedcharging customers for life insurance after they were dead. California lawrequires an insurer to pay out benefits to an heir no later than three yearsafter the policyholders death. Insurers keep track of the policyholders who die by looking at SocialSecurity data. Once a death is on file, insurers do not expect payment.However, the burden falls on the beneficiary to file the claim for benefitsafter the policyholder dies. If the beneficiary does not file the claim theinsurance company continues to bill the deceased policy holder for hispremiums.
See Alan Farnham, Dead Being Billed for Life Insurance, ABC News, Jun. 22, 2013.
