How many policy holders do you think it takes to screw in a light bulb? Ok so I’m not joking here on this one there is a record number of policies out there where the insured’s have passed away and no one is claiming the Life Insurance Money! I know I hear you all saying that can’t be true Jon but I am telling you it is true. Whether it is because the insured never told the beneficiary they had a policy or the agent moved on there are too many unclaimed life policies out there. Have look at this article on what they are trying to do to prevent this from happening: Ed Leefeidt on Fox Business News.
If you get an official-looking envelope containing a letter from MarketSphere Unclaimed Property, don’t throw it away. No, you didn’t win $10 million from Publishers Clearing House, but you could be the beneficiary of a deceased relative’s life insurance policy.
MarketSphere is teaming up with LexisNexis, one of the largest providers of public data, to assist life insurance companies in finding the beneficiaries of billions of unclaimed dollars. This will also help the insurers stay out of trouble with state attorneys general, as well as insurance commissioners.
Life insurance companies have been atop insurance regulators’ hit lists since last year, when Florida, New York and California officials said that many life insurance companies were not trying to track down the beneficiaries who stood to collect when a policyholder died. According to Florida Insurance Commissioner Kevin McCarty, the amount insurers owe is at least $1 billion and could be “several billion dollars.”
‘Death Master’ shuts the doorProbes by some states have found that insurers don’t make a real effort to find life insurance beneficiaries. Instead, beneficiaries have to find lost life insurance policies on their own.
Life insurers often failed to use the Social Security Administration’s Death Master File to find out which policyholders had died so that beneficiaries could be notified. Death Master contains information for about 95 percent of Americans who died during the last 75 years, including birth dates, ZIP codes and Social Security numbers. Regulators have ordered life insurers to use Death Master to make sure they pay claims, or face class action lawsuits if they don’t.
But last November, Social Security pulled the rug out from under this plan: The government announced that the Death Master File would no longer provide recent records of those who died. Administrators said criminals might be using the Social Security database to commit identity theft.
Filling the voidThis void created an opportunity for LexisNexis Risk Solutions and MarketSphere. Elliot Wallace, LexisNexis vice president, says his company will obtain lists of policyholders from the insurers that subscribe to the LexisNexis/MarketSphere service, draw from more than 10,000 sources to determine those who’ve died, and then use its “linking” technology to identify beneficiaries by cross-referencing or doing a “relative search.” MarketSphere will then send letters notifying the beneficiaries that they can claim what is owed.
While it won’t rely on Death Master, LexisNexis will draw from the same sources, such as state databases. But unlike Death Master, which gave its information to anyone who paid, LexisNexis guards its database from scofflaws and takes precautions to make sure any insurance company using the service is a “real entity,” says Wallace. “We want to protect the data we have.”
This means that someone who wonders if he or she is a beneficiary can’t contact LexisNexis or MarketSphere to find out if an insurer owes him or her money. Would-be beneficiaries can, however, go directly to an insurance company if they believe their relative bought a policy from that company, or pay for a records search by MIB Group.
Or, they can simply sit tight and wait for whichever letter gets to them first — MarketSphere or Publishers Clearing House.
What should you do as an agent or agency of a policy. Let’s keep in touch with our clients reach out to them at least once or twice a year let them know you are still there and you want to check in and see if anything has changed in their lives. By doing this you might find out that they need more coverage or maybe they had a health change and they should convert their existing policy. Go that extra mile for your client’s it will pay off for you in the end.