MetLife is being probed for not paying claims in California allegedly for policyholders they knew to have died, but no claim was made by the beneficiaries. John Hancock recently settled with California over the same issue, which I wrote about a few days ago. Expect more, as the Wall Street Journal reports:
The news comes as authorities in 35 states are looking at whether nearly two dozen of the U.S.’s most prominent life insurers are failing to determine if policyholders have died, and aren’t turning unclaimed funds over to states in a timely fashion.
This is a very positive development for policyholders, since carriers will be compelled to be more proactive in finding beneficiaries. But given some beneficiaries are unaware of the life insurance policy, have died or moved away, many will still be unpaid. The state will be the beneficiary of unclaimed money left in limbo.
Lessons for life insurance owners
Make sure your beneficiary names and addresses are up to date. You may contact your carrier’s customer service department directly and provide them with that information. If you wish to change your beneficiary or contingent beneficiary, the carrier will provided you with a form to fill out and sign. Your writing agent can assist you with the proper forms and contact information.
If you have lost track your agent, the carrier may have your agent’s contact information. It depends on whether the agent is still in the business or still writes new business to that carrier. If your agent is no longer in the business or hasn’t contacted you periodically, it is in your best interest to ask another life insurance agent or to become your servicing agent. This is another layer of protection to make sure your claim gets paid. A good servicing agent will conduct an annual policy review. That’s what I do with my clients. This is especially important with cash value life insurance policies, either whole life or universal life, where you receive an annual statement. You can save thousands of dollars in premiums or by transferring your cash value into new coverage or spending down your cash value instead of paying premiums towards the end of your life.