For all kinds of good reasons, people keep their personal financial business to themselves.
And oftentimes, life insurance policies are not revealed to beneficiaries. Sometimes, policyholders forget they have them, or where.
The life insurance industry strongly supports efforts to help beneficiaries find policies so that they can get the money that was planned for them.
The fact that millions of dollars in death benefits goes unclaimed every year prompted the National Association of Insurance Commissioners (NAIC) to set up a policy locator service. This fall the NAIC reported that it has matched consumers with more than $1 billion in life insurance and annuity benefits since it began in November 2016.
To avoid having to use the service all together, the ideal situation is for policyholders to instruct beneficiaries on steps to take when the time comes.
September is an ideal time to have that talk.
That’s because September is Life Insurance Awareness Month #LIAM20 — a time of the year the life insurance companies and agents join together to encourage people to think good and hard about the role life insurance plays in families’ long-term financial security.
If a policyholder hears and appreciates the #LIAM20 message and realizes they have no idea what they did with their policy, check this out: Missing Policy Tips from ACLI. It makes clear that even if a missing policy is not recovered, it does not necessarily mean beneficiaries will lose out on money they’re entitled to receive.
A key recommendation is to check paper and electronic records to look for life insurance policies and the names of insurance agents.
The tips can be especially helpful for people who think they were a named beneficiary of a policy.
Open lines of communication whenever possible raise important awareness and make sure beneficiaries know about plans for them.