The basic premise of life insurance is to pass along property to heirs for assistance. Some of the wealthier organize estate planning for entities to carry out their wishes after they die. A large group of life insurance policy holders would like to be assured that their families will be taken care of, while some just want to make sure their funeral cost won’t be a burden.
Every year an exorbitant amount of life insurance money goes unclaimed. What is the number one reason? The beneficiary can’t be found. Even with the use of today’s technology, life insurance companies have difficulty informing the heirs of the deceased that they have money and assets just waiting for them to claim.
When a property goes unclaimed, the insurance company will hold onto it for a specific amount of time. During this time, the insurance company benefits from the holding. Eventually, they are required hand it over to the state. Once the state gets it, they record the unclaimed property as such and post it on their website for public viewing and the state benefits from the holding. There the property will stay until the property is claimed. The state avows that all unclaimed money will remain in that status indefinitely.
Each state has millions of unclaimed accounts totaling billions of dollars. Most insurance companies and state departments are unavailable for commenting on the subject which leads you to believe it is an unaudited system. Life insurance companies assure that they do their due diligence in locating beneficiaries, but procedures sometimes get in the way of getting the information through to them.
The responsibility often falls upon the beneficiary to pursue monies owed. Yet there is no formal process for determining if a life insurance policy even exists. Often the deceased never talked about a life insurance policy with a beneficiary nor were any clues given as to what company they might be insured (which would be clever). For those aware of a pending life insurance claim, there are insurance tracking services available which, for a fee, track the progress of claims. Tracers are groups which scour public records in search of unclaimed money for their clients in return for a percentage of the money found.
If money can’t be located using available resources, it may still be available. It just has yet to be turned over to the state and posted in public records. This process can take anywhere from two to seven years depending on the state. Once the record becomes public and the rightful beneficiary finds the unclaimed funds, they may claim it.