Unclaimed Life Insurance Tops $1B [AUDIO]
There could be a pile of money somewhere with your name on it. According to Consumer Reports, about $1 billion dollars worth of life insurance benefits remain unclaimed.
Senior editor Jeff Blyskal said the average unclaimed benefit is $2,000, but some can be as high as $300,000. He places much of the blame on insurance companies and their lack of effort to get people the money they're due.
"The insurance companies haven't been looking for beneficiaries. They wait for someone to come to them," Blyskal said.
The main database for the deceased is the Social Security Administration's Death Master File, which Blyskal said hasn't been frequented enough by the major insurers to acknowledge their customers' demise. He noted, however, the companies use the database quite often if it can get them out of paying someone an annual benefit. If the beneficiary passes on, the payment can stop.
Six major insurance companies recently settled charges related to the issue and agreed to perform a more concerted effort on locating beneficiaries.
"In fairness to the insurance companies, people change their name; they move," Blyskal added. "It's easy to lose track of people."
Blyskal's advice for you:
- Check to see if you're in line for any benefits. Unclaimed property, after a while, is handed over to the state. missingmoney.com
- If you have a life insurance policy and beneficiaries, let them know they can expect something in the future.
- Beware of scammers. Given the recent settlement, crooks could prey on innocent people by promising an insurance payout, as long as they put out an "up-front fee."