by Guest » Mon Oct 07, 2013 09:52 am
Are beneficiaries of a life insurance policy notified whenever the policy comes in place? If someone doesn’t disclose the names of the beneficiaries, how would the persons come to know?
Posted: Mon Oct 07, 2013 12:16 pm Post Subject:
Are beneficiaries of a life insurance policy notified whenever the policy comes in place?
This is a matter for the policyowner, not the insurance company. A beneficiary has no legal interest in a life insurance contract until the insured dies. Insurance companies are not required to notify a person that he/she is a life insurance beneficiary while the insured is living, simply because, in most policies, the policyowner has the right to change the beneficiary at any time, and the person named when the policy is issued might not be the beneficiary years later when the insured dies.It is always a good idea for the owner of a life insurance policy to let someone -- a friend, spouse, attorney, or anyone else -- know where the policy is, and who the beneficiary is. It is not supposed to be a top secret thing hidden from the whole world. Nevertheless, there are hundreds of millions of dollars that have never been paid to beneficiaries because they don;t know they are the beneficiaries of someone's life insurance.
All (or almost all) insurance companies subscribe to the Social Security Death Master Index, and they tend to find out when an insured has died (if Social Security has received notice of a person's death in order to claim the $255 death benefit). For years, the insurance companies have used that information to stop making annuity payments to dead people, but have deliberately not used that same information to notify beneficiaries of the availability of death benefits.
Well, thanks to a number of multimillion dollar "multistate" settlements, major insurance companies (and all others are expected to play by the same rules) have agreed to take a more proactive role in locating beneficiaries and informing them of their need to file a death claim.
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