One of the recently conducted investigations by DFS (Department of Financial Services) has unearthed unpaid life insurance benefits accounting for over $1 billion for not $336 million New Yorkers, but also for people from other states in the country. Over the last 24 months, government officials from various parts of the country have been investigating the largest life insurance providers nationwide in order to find out the number of life insurance claims that have been unpaid. As per information from certain states, thousands of life insurance policy holders had been dead for decades, but their dues remained unclaimed since the policy beneficiaries did not know the procedure to file for claims.
All life insurance policies stipulate that the beneficiaries of the policies should inform them about the demise of the policy holder. While a large share of policy holders’ beneficiaries adheres to this norm, there are millions of others who are completely ignorant of this aspect. Insurance providers, in turn, turn over the unpaid money to the unclaimed property department in the state, as specified by the prevailing guidelines.
During the course of the investigation, the Department of Financial Services instructed the life insurance coverage providers to come up with a database of names of consumers who were dead based on the duration for which the policy premiums were not paid for. Governor Andrew Cuomo, in December 2012, formally signed on a legislation that stipulates making permanent the maintenance of the database to simplify the process of deciphering if a policy holder has died, so the policy benefits can be handed over to the beneficiaries.
The Superintendent of Financial Services in New York, Benjamin M Lawsky said that their investigation helped bring to light the billions of dollars that had found a place in the books of leading life insurance policy providers, in the form of unpaid benefits. He said that the industry has now taken the right measures to simplify the task of tracking the death of a policy holder and intimating the beneficiaries about the benefits they are entitled for. As a result of this probe, officials in New York, said that thousands of beneficiaries, including 25,000 from New York, have already received their benefits.
