Every year, millions of Americans pass away and many of those people have life insurance policies in their names. However, something that can occasionally happen is that their loved ones do not know about that coverage and therefore make no effort to claim the potentially large amounts of money that might otherwise be due them. As such, many states now undertake regular efforts to educate consumers about these issues.
The office of Louisiana state treasurer John Kennedy recently did a lot of work to try to uncover unclaimed property owed to those who live in the state, and when it comes to life insurance they found a significant amount of unclaimed policies, according to a report from the Baton Rouge Advocate. After comparing the data from a number of life insurance companies versus the Social Security Death Master File, the office found many policies over the last eight years that had gone unclaimed, totaling more than $31 million in benefits. One such policy had a payout of more than half a million dollars. As was the case with that big one, many beneficiaries might not even know that the policy existed in the first place.
What's being done for beneficiaries?
Even in the event that unclaimed life insurance policy payouts are discovered, it may not always be easy for the state government to track down the people who are supposed to get that money, the report said. For this reason, Kennedy's office has set up both a hotline and a website where people can check to see if they have any such property in their names, and the hope is that this will pique some people's curiosity, and allow them to get some of the money owed to them. The Louisiana Unclaimed Property Program has been in place for more than four decades at this point, allowing some 570,000 people in the state to claim a total of $338 million in many forms.
The more life insurance companies can do to work with state governments and potential beneficiaries of an unclaimed policy, the better off all involved are likely to be. That's because a more transparent process can create more trust, avoid regulatory issues, and help people sort out major financial problems they might have in the wake of a loved one's death.