Do you know the reasons for unclaimed life insurance benefits? Is it possible that beneficiaries can’t receive the benefits from life insurance company?
A reader from Pennsylvania, USA asked a question via email (see our contact details if you want to ask us questions). Danny F. wants to know what would happen if the insured didn’t tell the beneficiaries about his policy. He understand the importance of life insurance when we share the quotes of Suze Orman “You don’t need life insurance unless you have dependents“.
“Assuming the insured individual died and no one knows (even if his relatives) that he was insured? What if the beneficiaries don’t have any proof as a beneficiary? Can they still claim benefits?”
5 Major Reasons for Unclaimed Life Insurance Benefits
- The life insurance company and the policy’s owner and/or insured might have lost track of each other.
- The life insurance company might not know that the insured has died.
- The life insurance company might not be able to find the policy’s beneficiaries (legitimate claimants).
- Beneficiaries might not know that a life insurance policy exists under which they are beneficiaries.
- The original life insurance company no longer exists (it might have merged, changed its name, moved to another state) and cannot be located by the insured, owner or beneficiaries.
Source: Insurance Information Institute (III) @ http://www.iii.org/article/unclaimed-life-insurance-benefits
How to Avoid Getting Life Insurance Benefits Unclaimed?
The first thing to do after you bought life insurance policy is to tell your beneficiaries about it. Have a photo copy of your original policy and give your beneficiaries a copy. That will be the solution for reason number 4 that says; “Beneficiaries might not know that a life insurance policy exists under which they are beneficiaries.”
It is recommended to choose the best life insurance company wisely. Don’t just rely on popularity. Search for the stability of the company. Also, consider “strong balance sheet” of the insurance company.
The Answer to Danny’s Question:
Yes, they can still claim the benefits as long as they know the insurance company. However, knowing which “insurance company” to where the “relative” was insured is very difficult.
Related: Define Life Insurance Policy in Your Own Words
To avoid unclaimed life insurance benefits. The insured person should immediately tell the beneficiaries about the insurance policy and the beneficiaries should inform the insurance company that the insured died. I think this tips was already said to you by the insurance agent when you are buying your policy. Am I right? If you have any questions related to “insurance”. Just send me an email or leave a comment below.To see latest updates, like us on Facebook
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