With life insurance, it is generally understood that they are bought and paid for in the hopes that the loved ones left behind will not have to go through as harsh of times as necessary. The payouts are meant to be useful, and to help take care of any debts or issues leftover by the deceased, and make sure that things are in order, so that backlash doesn’t affect the loved one.
Unfortunately, there can be times where an error in miscommunication, as well as, at points, blatant disregard by insurance companies themselves, can lead to life insurance policies not being claimed. This can be for any number of reasons, but all lead to the same question: What happens to the payout money?
Reasons a Life Insurance Policy will go Unclaimed
The primary reason a life insurance policy may go unclaimed will be due to the process as to which an insurance company will say they have to go through in order to verify the death of the policyholder. This can differ from region to region, but the main basis still stands: they do not really ask about a policyholder, and see if the policyholder is alive or not. Instead, they only payout when they are notified of the policyholder’s death. As such, if no one informs them of it, they take it upon themselves to just not payout.
Another way this can come about is if the beneficiaries themselves do not realize that they are beneficiaries. Whether this comes from a lack of information from the insured member’s side, or if the beneficiary simply forgot, it can occur. When this happens, they do not realize that they are the policy’s beneficiary, and thus just forget to file a claim for it.
In both instances, the insurance company attempts to win out. This has been an ongoing issue with many states, and has been the primary process as to which unclaimed life insurance payouts have gone.
What is changing and how do I find out?
There is no sure fire way to find out if the rules have changed. Each state is a bit different, so there may be a bit of digging going on.
To start, make sure that you are looking at where the insurance company is located. If you, the beneficiary, are living in State A, but the life insurance company that the policyholder had been insured in is in State B, you will have to follow the State B policies in order to get the proper payout that you deserve. This goes for many states, and can easily be overlooked, but each state does have minute differences when it comes to the practices.
These laws and institutes are having to change, though. Over the past few years, many states have attempted to regulate how an insurance company can get away with such nasty schemes and systems. Instead, they hope that they can start to regulate time frames where a company must go through and look at all of the life insurance policies not claimed, and start paying them out in a timely manner.
If you have a denied life insurance claim, get a trusted life insurance lawyer. With a life insurance attorney’s help, You can get the money to which you are entitled.