Unclaimed benefits from life insurance
there have been cases in which the benefits of some life policies are not claimed and, although this is a sad and unfortunate situation, it is even more so today that many people are going through difficult situations economic.
Although it is not very frequent, there have been cases in which the benefits of some life policies are not claimed and, although this is a sad and unfortunate situation, it is even more so today that many people are going through difficult situations economic. But this situation can be easily avoided. First, it must be known under what circumstances it can happen that a policy goes unclaimed. There are these five situations that can contribute to the problem:
1. Both the insurance company and the owner of the insurance policy or the insured, may have lost track of the existence of said policy.The main way that financial institutions (banks, credit cards, insurers, investment companies, etc.) is through regular mail, which is commonly nicknamed in English as "snail mail" or "slow mail". As with any other person with whom you wish to maintain contact, the consumer needs to notify their insurer if they move or change their mailing address. It is true that the US Post Office will forward correspondence delivered to a previous address to your new address, but this only happens for one year and as it passes, the sender is not notified of the new address.So if you move, make sure you change the mailing address with all the financial companies you interact with, as well as the insurance companies, including your life insurer.All other contact details that vary should be notified to your insurer: phone, fax and email changes.
2. The insurance company may not know that the insured is deceased. Insurers have no way of knowing if an insured has died unless they are notified about it, which often happens when survivors or policy beneficiaries contact the insurer. The insurer cannot assume that the insured is deceased even when the policy is paid in monthly installments and they stop being paid. Moreover, some permanent life insurance policies that have associated cash accounts ( cash value accounts ) have a function known as Automatic Premium Loan (APL) or Automatic Loan for the payment of the premium , which allows the installments of monthly premiums continue to be made by withdrawing money from the cash account associated with these policies. In this way, the policy is not in default and remains in force, avoiding the unfortunate possibility that insurance coverage will be lost due to a payment error. When the APL function exists, the policy will continue to receive payments and therefore will remain in force as long as there are funds in the account associated with it. If the situation arises that the money in the associated account runs out, and the premiums stop being paid, then the policy will expire. There are also policies in which all premium payments have already been made - as is the case with some policies that are paid in cash or with few consecutive payments, and the insured will live many more years after paying the policy, so Failure to make premium payments does not mean that the insured is alive or deceased. In these cases, insurers simply do not need to send more invoices for payments. Also, in the United States, there is no general list of people who are alive or not. The closest thing to this file is the list of beneficiaries of services provided by the Social Security Administration Office.-SSA). The list of income for SSA benefits includes those people who are receiving retirement or retirement benefits and physical disability and when a person dies it is established in the list that that person will no longer receive said benefits. But this list does not include all the inhabitants of the country. In fact, there are millions of people who, because they were not covered under the SSA benefits program, would never appear on this list. Some examples of people who do not receive SSA benefits are federal employees, state employees, some railroad company employees, and other minor groups. Therefore these people will never appear on the SSA list. The insurers that issue life policies know of the death of the insured persons when the beneficiaries or other entities related to the policy notify them of the death of the insured. For example, when life insurance is purchased through a group such as an employer, the employer may notify the insurance of the death of a worker insured under the group. It may also happen that the worker has separate individual insurance with the same insurer and the latter be able to notify the beneficiaries of the different policies (individual and group), but with frequent job changes, these situations become less common since they are not employees always change their insurance policies when they change jobs.It is a good idea to provide your existing insurance policy information to your beneficiaries; things like the name and contact numbers of the insurer with which you have the policy, as well as its number. The beneficiaries may in these cases inform the insurance of the death of the insured and start the claims process when the time comes.
3. Sometimes life insurance companies find it difficult to locate the rightful beneficiaries of a life insurance policy.Two typical problems can arise in this scenario. First, that the description or contact information of the beneficiary is insufficient or imprecise for the insurer to locate them. This is the case of very general beneficiary designations, for example that only indicates “my spouse” (“my spouse” or “my wife”) or “my children” (“my children”) but does not name these people by name and surname, nor does it provide a telephone address or a social security number with which to identify them.These problems can be avoided by properly naming the beneficiaries: provide relevant information to identify them: full name, address, telephone numbers, social security numbers if you know it, passport, etc.) and above all, notify your beneficiaries that they are being included in this type of coverage so that they can be properly identified when the moment arises. Other times the problem is that, despite being clearly named, the person is not easily reachable, especially if the policy was taken many years ago. There are even times that the beneficiaries have died before the insured. Remember that for privacy reasons, insurers cannot disclose beneficiaries when they are listed until the insured dies. Only the insured can indicate to the beneficiaries that they are listed in his policy.
4. The beneficiaries may not even know that they are listed in a life insurance policy, they may not even know about the existence of said insurance.It may seem strange but many beneficiaries do not even know that they are listed on someone else's insurance policy, be it an individual or group policy. This can be due to many reasons and is the prerogative of the insured. It is your personal decision; however, this could cause enormous problems when having to pay a policy since those who should be interested and make the claim do not know that they have to do it. For this reason, it is important to inform survivors and family members of the existence of insurance policies, whether individual or group, and provide details such as the insurance company, the state and city where it was obtained and, if possible, the policy number. . 5. Other cases may be due to the fact that the insurer no longer exists, has moved to another state, changed its name or merged with another company and after many years it is not possible to locate it, either by the insured, the beneficiaries or the owners of The policy.
Situations like the company changing its name can make it difficult to locate a policy and make it more difficult for beneficiaries to file a claim. Insurers that produce life insurance are no different from other companies in the industry in this regard, except that their products are longer-term, several decades old, making it more difficult to track very old policies even within the same company. However, it is almost certain that a company that is changing its name, is merging with another, or implementing important changes in its management or operations, will inform its clients and policyholders of such changes. One way to keep up to date with these possible changes is to create a file with the communications sent by insurers and notify your beneficiaries of the changes that are known and that they also know of the existence of such a file.
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