Unknown life insurance policy may end up at your doorstep next. No, this is not an attempt to befool you. It is really a fact that the insurance companies are under the instruction to seek the lost beneficiaries of life insurance policies. So, if you’re lucky enough, you might be the next one to receive lump sum payments from your deceased relative’s life insurance policy.
The life insurance companies are being asked to identify the deceased policyholders, and search out their respective beneficiaries. Kevin McCarty, Insurance Commissioner in Florida, and Benjamin Lawsky, the State Superintendent of Financial Services in New York have instructed the life insurance companies to locate the lost beneficiaries, so that the benefits can be forwarded to them.
Many life insurance policies have been gathering dust over years, since no claims have been made to receive the death benefits. That is because many individuals even don’t know that they have been listed as beneficiary on a policy. As for those who know, they can’t find the policies or the companies which issued them. Besides, finding a lost life insurance means going through a lot of hassle.
So, if an insurer contacts you for the purpose, you must know how the death benefits will be paid out to you.
What happens if there are multiple beneficiaries?
If you’re the primary beneficiary, then you’ll be unquestionably handed over the total sum as death benefit from the policy. In case there are multiple beneficiaries named in the policy, the insurance company will try to contact each of the beneficiaries. If all of them are alive, then the death benefit will be paid accordingly, as per the policy specifications.What if the other beneficiaries can’t be traced?
You’ll receive your share from the policy. The rest of the amount, i.e. the shares of the other beneficiaries, will be deposited at that particular state’s unclaimed property department.What if you’re the only survivor amongst the multiple beneficiaries mentioned on the policy?
If all the beneficiaries mentioned in the policy had expired, and you’re the only survivor, you’ll be entitled to receive the full amount as death benefit.Is interest paid for the delayed time period?
Yes, interest is calculated on the amount that you’re entitled to receive from the policy. It is calculated from the date of the demise of the insured person to the date of benefit payment. However, the limit of interest payment depends on the insurance company and the policy specifications. The state laws also affect the insurance payments on the policy death benefits. If you are successful in locating a lost life insurance policy, and the insurer denies payments on the ground that the policy had lapsed during the lifetime of the insured, you may report this as an insurance fraud.Blog Category