Where do you turn to find a lost life insurance policy? It’s a big problem
Michigan consumers find more help in tracking down long-lost life insurance policies in order to make a claim after a loved one dies.
Key Points
- Where do you look for clues? Check safe deposit boxes for insurance polices. Look for names of agents.
- See michigan.gov/unclaimed property to find lost checks and some unclaimed life insurance policies.
Too often, surviving loved ones run across all sorts of paperwork, maybe scattered statements in boxes or a bag. But nothing seems to point to a life insurance policy.
Did Mom or Dad even have coverage to pay funeral expenses or toward an inheritance?
What insurer would hold the policy? Who knows?
For some families, tracking down life insurance policies ends up being one of the most grueling tasks they face after a death in the family. But the hurdles can be so hard that Michigan and other states have begun new services to help consumers uncover polices.
During the first month of its new service, Michigan received more than 250 requests for help finding a life insurance policy or an annuity following a death.
“Their loved ones have paid into a policy for years and if they can’t find it, no one reaps the benefits,” said Amy Miilu, complaint specialist for the Michigan Department of Insurance and Financial Services.
I discovered first hand how ridiculous all this can get after my Dad died in 2001 and my Mom passed away in 2011. It was a frustrating, time-consuming experience trying to actually get some rather modest, long-ago-paid-up, life insurance checks in our hands.
We’ve heard stories of family members who would be receive a check for one policy after the death of a loved one. But they did not know about other policies at the same insurer. It could take years — if ever — to find out about those other policies. Or perhaps the insurer would stop issuing monthly checks for an annuity after a death but would be no help alerting the family to a life insurance policy.
It’s up the the family to file the claim.
When my Dad died, my mother filed a claim on his life insurance policy. But we didn’t know about another policy that my father held with the very same insurer until after my mother died 10 years later. It was one incredible, ridiculous effort and it felt like an amazing victory to finally receive that very modest check.
State regulators, led by the Florida Insurance Commissioner, have pressured life insurers for several years to check their policyholder lists regularly against a death database and try to track down survivors.
The stories involving lost life insurance policies — including those from a “CBS 60 Minutes” piece in April and others in the past several years — have been horrific.
Consumers challenged
The problem was first uncovered in 2009 as part of an audit by the Florida Office of Insurance. But it’s taken work by state insurance regulators, a national task force and public hearings in many states to address the challenges faced by consumers.
In the past five years, many insurers — but not all of them — have agreed to multiple, multi-million dollar settlements and agreed to turn over money to the unclaimed benefits divisions of states when beneficiaries do not make claims after a death.
Michigan’s new tool, which was launched in August, can help families uncover missing policies months or years before they could show up in the unclaimed property databases.
Michigan has received 390 requests overall through early November. There have been 61 matches and four new death claims have been initiated.
“It is so overdue,” said P. Mark Accettura, a Farmington Hills attorney who specializes in estate planning and elder law.
Families are under constant pressure to figure out if they’ve found every single asset left behind by a loved one. Sometimes, some companies might have provided a death benefit as part of employment, and it’s possible that the family doesn’t know about it.
Michigan’s Life Insurance and Annuity Search Service requires that you submit a form online at www.michigan.gov/difs to find a deceased family member’s life insurance policy or annuity contract that was purchased in Michigan. (You cannot find life insurance policies on those who are still living.)
Each month, the Department of Insurance and Financial Services will submit the requests to insurers. The insurers agreed to search their records but will not make contact with anyone who is not a beneficiary or not legally authorized to receive information about the policy.
“The consumers are told they should be hearing something within 60 days if there is a match,” said Cathy Kirby, director of the office of consumer services for the Department of Insurance and Financial Services.
The names can change
Some insurance companies have merged or changed names, so the service might help there, too.
Jackson National Life Insurance said it supports the Michigan Department of Insurance and Financial Services’ program designed to help beneficiaries.
“We strive to fulfill all commitments to our policy and contract holders and have dedicated resources to ensure beneficiaries obtain all of the benefits they are entitled to receive,” the e-mailed statement said.
In Michigan, the program is voluntary and companies are not required to participate. But the companies that provided a contact to the state insurance department are essentially agreeing to search their records.
The state is able to run a report to determine which companies are accessing the files and which ones are not. Most of the companies that are not participating have not written policies in Michigan.
In the past, the state would receive requests from consumers to help them track down policies. But many times, the state would have to refer consumers to work with a fee-based service, such as the MIB Solution’s Policy Locator Service.
To find the policy
The National Association of Insurance Commissioners launched the Life Insurance Policy Locator in the summer, as well. The regulatory association also has a list of tips on how to find lost life insurance policies at its website www.naic.org.
Other states also are trying this early tracking measure. In late October, the Pennsylvania Insurance Department announced a similar search tool.
In an ideal world, of course, you might not need that clearinghouse. The beneficiary would know exactly where the policy is located, have the exact policy number and file a claim upon the person’s death. Ideally, families need to make sure that they share such information with beneficiaries.
If only, of course, we lived in an ideal world.
“Too often, we’re helping people with what I call the morbid scavenger hunt,” Sanford J. Mall, an elder-law attorney and senior partner at Mall Malisow & Cooney in Farmington Hills.
Sometimes, people do not leave proper records. Or records are no longer around after a fire, flood or theft because no back-up records were stored, he said.
In Michigan, insurance policies are reverted to the state treasury’s unclaimed property division three years after the proceeds, benefits or refunds become payable and remain unclaimed.
Unclaimed property can come from anywhere including misplaced checks and yes, life insurance policies. The largest category of involves uncashed checks — which makes up 30% of all unclaimed properties — including cashier’s checks, money orders, and vendor checks.
About 19% of total unclaimed property in Michigan involves insurance policies.
In Michigan, consumers can start a search at www.michigan.gov/unclaimedproperty. Property valued over $50 will appear on the searchable site. In some cases, it can take a month or so to go through the process but it may be several months if additional documents, such as a death certificate, are needed.
You can also go to MissingMoney.com to spot property that was unclaimed in other states.
Nationwide, more than $2.4 billion has been reported in recent years to unclaimed properties programs at the state level nationwide, where consumers still may be able to claim money.
Most times, consumers aren’t finding $75,000 in an unclaimed policy. In Florida, for example, the average policy amount received to date is $1,361.
But of course, some policies can be worth far more. Finding that policy sooner in the process is the right way to go.
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Credits: Susan Tompor
Date: Novemeber 12, 2016