Several months ago I saw a "60 Minute" rebroadcast of a story about the responsibility of life insurance companies
when it comes to paying out death benefits.
There is no legal responsibility on their part if they learn about the
death of a policy holder to payout the benefit to the beneficiary unless the
beneficiary contacts the company. So
even if the next door neighbor of the insurance agent dies and the agent knows
this, the agent must wait until the beneficiary or a designated person contacts
the company.
I tried to find the episode; it seems to
have been taken down- www.cbsnews.com/.../60-minutes-viewers-call-foul-on-insurance-companies/. The gist was that companies earn interest on monies that are not paid out because no one has come forth with a
claim. SO IT IS EVEN MORE IMPORTANT FOR
US, AS RESPONSIBLE ADULTS, TO TELL AT LEAST ONE PERSON WHERE OUR IMPORTANT
PAPERS ARE KEPT. I called my insurance company and I was told
that beneficiaries or their designee have to contact the company to file a
claim before the due date of the next premium payment. For example, if I pay my annual premium in
January and I die in February, my beneficiaries have until December to file a
claim. Why? Because if I do not pay my next premium- and
I can’t because I'm dead- the policy will lapse and the beneficiaries will get
nothing if they have not filed a claim before the coverage lapses. That’s important. Especially if I pay in
January and I die in December, the timing is critical- the heirs have to act
quickly.
My take away from this is I am going to write a note and put
it with my papers telling my heirs to call the insurance company ASAP and get
the ball rolling.
This is not a discussion of the moral obligation of insurance
companies, it is one more reason to get your act organized. You don’t want your family missing out on all
those premium payments you made with the intent to help them pay off your final
expenses because no one knew you had a life insurance policy.
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