One of the dark secrets of the life insurance industry is exactly how often policy payouts go unclaimed, but now the National Association of Insurance Commissioners have developed a tool to help the benefits from those forgotten policies find their rightful homes.
With their new Life Insurance Policy Locator, the NAIC is serving U.S. consumers as part of an effort by state insurance regulators aimed at reducing the number of unclaimed life insurance benefits.
The consumer group says that, in the short span of six months, their policy locator has delivered some 1,800 beneficiaries with lost or misplaced proceeds from life insurance policies or annuities.
In total, the discovery of the lost benefits means that more than $17 million was returned to consumers, as of April 1, 2017.
Ted Nickel, the NAIC President and Wisconsin Insurance Commissioner, says this policy locator has resulted in more than 15,000 requests since being launched nationally in November, 2016. Nickel says the NAIC developed the locator to provide search capabilities aimed at helping consumers recover a deceased person’s life insurance policies and annuities.
“This tool is connecting consumers with lost, unknown or unclaimed benefits. Strong results in our first few months of this project show just how important this locator is to consumers. We expect these numbers to grow as more consumers learn about this tool,” says Nickel.
State insurance regulators have investigated unclaimed life insurance benefit payments since 2010, and in 2015 alone, life insurers have paid more than $74 billion in insurance policy benefits to consumers nationwide.
According to Nickel, nearly 25 regulatory actions have resulted in returning more than $7.3 billion life insurance proceeds to U.S. consumers.
request is received, the NAIC asks participating companies to search their records to determine whether they have a life insurance policy or annuity contract in the name of the deceased and calls on participating companies that have policy information to respond to the requester, but only if the requester is the designated beneficiary or is authorized to receive information.