Thursday, May 30, 2013
Beneficiaries of forgotten life insurance policies are suddenly beginning to receive checks in the mail. What might seem to many like a scam is actually an increased effort by major life insurers to determine if policyholders have died and to locate their beneficiaries.
In response to an investigation, Nationwide started this trend by striking a $7.2 million deal with seven states regarding enormous amounts of money in unclaimed benefits. Other insurers like Metlife, Prudential, and John Hancock have followed suit with similar agreements.
Life insurance policies generally require the beneficiaries to notify the insurer when the policyholder dies, but the new agreements have insurers take more initiative to find beneficiaries. Nationwide has since paid out about 3,000 of the 4,000 old policies they had identified. The average benefit is around $2,000.
See Mark Williams, Insurers Finding Beneficiaries of Forgotten Life Insurance Policies, The Columbus Dispatch, May 26, 2013.