Term Life Insurance Funds Unclaimed In New York
UPDATE 4/24/12 - A recent probe into New York state life insurance policies discovered unpaid life insurance benefits totaling about 30,000 policies and over $262 million in benefits. Governor Andrew M. Cuomo stated that this investigation shows that something must be done fast to rectify this situation. Families throughout New York are owed the funds that are rightfully theirs as well as an explanation from the insurers as to why this has continued to be an issue. The research shows that life insurance companies are not regularly checking the death lists to make sure the policies get paid out appropriately.
Recent data shows that there could be millions of dollars in withheld life insurance benefits that have not been disbursed properly according to the article "NY Officials to Investigate Unpaid Life Insurance" found on the Wall Street Journal. When a policy holder passes away, their term life insurance pays out to a beneficiary. This assume the beneficiary can be found. Often times, beneficiaries listed on the policy are unaware they are owed money and the insurers don't always take the necessary steps to find the rightful owners of the funds.
New York's attorney general and comptroller have started investigating these unpaid funds in hopes the rightful owners can eventually be reached. The ultimate goal is to ensure that life insurance companies keep promises made to the state and beneficiaries. Attorney General Eric Schneiderman believes this is the largest and most comprehensive investigation of life insurance practices in the nation.
The attorney general's office started investigations earlier this year to determine whether the industry was failing to give unclaimed funds to the comptroller's office which is required by New York's law after funds have gone unclaimed for three years. The insurer and the state should be making attempts to find the rightful owner. Thomas Workman, president of the Life Insurance Council of New York, believes that insurance companies are in compliance with their contracts and are following state regulations.
There are suspicions throughout the industry, but the investigation hopes to incorporate stricter regulation to make sure proper protocol is taken with people's money. Life insurance is in place to help families after loved ones have passed away and it's important the money reaches their hands. This is why it's crucial you notify your beneficiaries of any policies they may be listen on.