Life Insurance Money That Hasn't Been Claimed

This may be a bit of a surprise, but there is a ridiculous amount of money that doesn't get claim every year by the beneficiary of a loved one. This is not due to the insurance company not paying, but because the recipient of the death benefit does not know that the money is owed to them. The insurance company will try to locate the beneficiary, but if they are unsuccessful in finding the beneficiary, or were not given the knowledge of a policy holders death, the money will then sit and go unclaimed until a policies recipient comes forward. It is the policy holders responsibility to inform the beneficiary of the insurance policy that is in place, once one has been established.

Like I said before, the insurance company will attempt several times to get the money to the contracted beneficiary but the process can sometimes take year to complete. After several attempts, the death benefit will be handled by the states unclaimed property division. Now what usually happens from here is that the state will advertise the unclaimed benefit on the internet and place it in the newspaper to move closer to finding beneficiary. While this search for the recipient of the money is in process, the state and the life insurance company will continues to make gains from the money that hasn't been claimed, which could take away from the beneficiary potentially earning profits from the money.

This is mind-blowing but in a report by Paul Sullivan from NYTimes.com entitle "Tracking Down and Collecting Unclaimed Life Insurance", since the year 2000 the state of New York has accumulate over $400 million in Life Insurance money that has not been claimed by the appropriate party. New York has paid out approximately $64.5 million in insurance money. The spokeswoman for the State Comptroller Vanessa Lockel, has stated that this is just a meager portion of the $10 billion the state has received in death benefit money since the early 1940's. In any given year that you point out, there is about 20 percent of the money that actually gets claimed. There is also a report of an account that has a staggering $1.8 million in death benefit money since 2004 that is still just sitting in an account.

As crazy as this sounds, but the majority of the death benefits reserve for the contracted beneficiary will never collect the money. Sadly, this money will be used up by the state that the policy was instated in during the life of the insured. When I say "sadly", it's not to sound materialistic, or to seem as though these families would rather have the money over their loved ones, but these beneficiaries are entitled to this money which could in turn change the families lifestyle for the better. With all of this being said, the Life Insurance companies do try and use every available resource to find the designated beneficiary. Also, there is a large number of insurance companies that has a department that dedicates all of its affairs to locating the owner of these unclaimed death benefits. Keep in mind that if the money is indeed handed over to the states unclaimed property division, it is not lost to the beneficiary and can be claimed whenever the owner becomes aware of its existence, but will be used towards handling the states issues until it has been claimed.

Source by Bobby E Richardson