Consumer Services for Lost Life Insurance

One of the many services that The Insurance Library provides for consumers, is to locate current contact information for life insurers. Often people obtain a policy when they first start working, get married or have their first child. They then stick with that policy for the next 50 or so years. In the meantime, the policyholder may receive a letter or two informing him of mergers, acquisitions or just name changes. Unless they're hoarders (and let's be honest, even if they are how would they find a particular piece of paper?), most people end up throwing out the update. When the time comes for beneficiaries to make claims, they only have that original policy with a company name that might be three times removed from the current name. The Library is always happy to use our resources to help consumers trace the insurance company forward and provide them with current contact information.

A recent article in the New York Times caught my eye, though. It deals with another request we often get from consumers, lost policies. Sometimes a person calls and, instead of having a copy of that original policy, (giving us a foot in the door on the research) they just know that their loved one had a policy, but can't find any documents mentioning with which insurance company the policy was placed.

It's unfortunate, but there's not much we can do in a situation like that. If the person who died worked for a company for a significant amount of time, it's often useful to contact that company and see if there was a group life policy put in place through them. They would be able to let the beneficiary know which life insurance company they used and benefits can be found that way. There are also some companies out there who can try and trace if the person applied for life insurance, but it costs money to initiate the trace and they don't always get results.

The Insurance Information Institute has a great article outlining steps consumers can take when searching for lost life insurance policies.

State insurance regulators in at least 30 states are working hard to make lost policies less of a problem. The New York Times article I mentioned above discusses three life insurance companies who have settled with various states over "failing to keep track of policyholder deaths, trapping money that should have gone promptly to the beneficiaries." The companies have pointed out that: "Contractual language in the life policies says the survivor, or a representative, must file a claim to receive the payment. State insurance regulators said [the companies] made the case that they had not broken any laws by failing to seek out the survivors, but could have done more than they did."

We'll see how this issue progresses and if there are any major developments we'll try to write on this topic again!