The checkbox on new hire paperwork about life insurance, may start to seem a little more important during the days of COVID-19. For many it was an obvious choice when the employer was giving something for “free.” Professionals have a safety net policy to help their family members for a short time. For consultants, self-employed and business owners, life insurance was a security blanket. A new stress has emerged as the media has suggested that the coronavirus cause of death would not be covered – this is not a true statement.
The most common causes of death – heart disease, cancer, and accidents, are still present and affecting all age groups. 74% of deaths in America stemmed from 10 causes, and the coronavirus may make it on the top-10 list. The CDC reports that about 647,000 Americans die from heart disease each year, while nearly 600,000 people die annually from cancer. Currently the increasing numbers of people affected by the virus are resulting in changes in all kinds of data. Insurance companies will be a valuable additional source of data as they collect this information. The Yale School of Public Health recorded an estimated 15,400 excess deaths in the United States from March through early April, twice as many as were publicly attributed to COVID-19. Life insurance companies are receiving higher numbers of applications as end-of-life conversations and preparedness are emerging as necessary, not taboo topics.
Reviewing your Life Insurance coverages
This is a good time to review the safety net or security blanket policies that you may have. You will come across many different types of life insurance policies when you start shopping––and not all of them are available from every company.
When you narrow down a policy, reviewing the type of insurance you have against your current lifestyle and needs may be advantageous. New applications are being accepted, and many companies have extended the time needed to complete the medical exam to 120 days, or 4 months. News9, an Oklahoma based news outlet, reported that individuals shopping for new policies may notice that e-signatures are now acceptable.
According to Glen Mulready, Oklahoma Insurance Commissioner, older individuals may have more trouble finding coverage.Insurance companies view older applicants as high risk and with the current economy, some have decided to limit exposures. Fortunately, there are a variety of life insurance companies, so there is a policy type for all. Finding an agent that is affiliated with multiple providers may be advantageous and save time when reviewing rates.
Accessing your Life Insurance
Upon your death, your next of kin will need to make a claim to access the life insurance policy or policies that have been created for you. These people may or may not be your beneficiary. There are three steps that need to take place before any money is released.
- Locating the policy. This involves finding the name of the company or companies that you purchased life insurance from. The NAIC, has an online life insurance policy locator service – https://eapps.naic.org/life-policy-locator/#/acknowledgment
- Connecting with the agent. The agent from the company will assist with the timeline process, provide the policy number, and necessary forms to be completed.
- Completing the Paperwork. Fill out the forms, order the death certificate and mail the forms to the company without delay. Often there is a choice to pick a lump sum or installment payouts.
Typically, the insurance money is released within a few weeks––but there are exceptions. According to Marketwatch, an insurer might deny a claim for a coronavirus death if the policyholder submitted an inaccurate or incomplete application. With this in mind, it may be worth spending a few minutes reviewing your paperwork for gaps.
As you work through the process of applying for your life insurance, reviewing your coverages or submitting a claim for a loved one, document all your findings and notes on InsureYouKnow.org – an online information storage site that allows you to access documents, and files remotely relating to your affairs. There are various levels of access to allow your family members, caregivers or business associates insight into the documents, as needed. There is even a reminder feature to help you update or revisit the policy from time to time.
Our days are full. Our lives are full. We continue in our daily routine. But then something happens – the car doesn’t start, there’s a storm which makes the fence fall, the washer stops working mid-cycle. After the initial panic and stress, we utilize our resources and find a way to prioritize that and get it fixed. Perhaps a neighbor or our partner lends a hand, or we contact a handyman or the warranty company. However the larger “somethings” take a while to fix – the car needing new parts, the fence damaging the water line, or the appliances that need replacing – which alters the way that our days and lives function. Multiple resources are required to help continue our daily routine. In some cases there is no way to fix the something and we need to stop our lives and re-evaluate what life will be like now. The resources cannot fix or support us – but Insurance can help.
There are so many types of insurance – car and home insurance are the most commonly marketed along with health. Every year – the National Association of Insurance and Financial Advisors dedicates September to Life Insurance Awareness Month. They launch a site and full spread of marketing materials on www.lifehappenspro.org to educate the public about the importance of planning ahead for the “life happens” moments. Life insurance has been misconstrued as a product that is only available for individuals with excess or resources but there are several options for all types of people.
When you search “insurance” in google – 4,960,000,000 results – pop up. How do we find the time, the right advisor, and the right type of insurance for your personalized needs?
Go to the well-known companies – the ones that show up in the top 10 search or the ones that are advertised in your life (television, billboards, newspapers, flyers in the mail). They often have resources that inform about product types before even interacting with the sales area.
Go to someone based on referral – the ones that your friends or neighbors recommend. Family members alwayss have an opinion on something and even a negative story can steer you in the right direction. If you don’t have a community of people in your life to ask, putting an “ask” out on social media will provide comments that could be useful.
Go to a website that provides prices – the ones that can give you information without interacting with people. It’s tough to know what is a good price without knowing a ballpark range. An example of this is insureyouknow.org which provides a quote directly to your inbox after answering a few simple questions.
Insureyouknow.org can support you with your life insurance needs by providing you quotes directly on their website. There are also other InsureYouKnow.org product offerings to help you reference those important records when the “life happens” moments occur. It’s a safe place to store all the information in case you need to access it remotely – or from the comforts of your own home. An annual plan is available to support your budget needs.
A life insurance policy works such that the policyholder pays a monthly or yearly premium and when he or she dies, the insurance company pays the benefits to the deceased’s spouse or children or anyone who has been nominated by them.
However, this is not always the case.
According to a recent investigation, as many as 35 of the biggest insurance companies in the United States have not settled the claims with beneficiaries and have been sitting on billions of dollars of money that does not belong to them.
Most of this happens due to the beneficiaries not being aware that a policy exists so the benefits end up not being claimed. As per estimates, as many as one in four policies remain unclaimed in the United States.
Legal Status of Unclaimed Life Insurance Benefits
The legal status of what happens to insurance payouts that are left unclaimed depends on the type of policy – term life insurance or whole life insurance – that was in place and whether it was paid up and in force at the time of death.
Whole Life Policy
In the case of whole life policy, if the premiums were up to date or fully paid, the beneficiaries are entitled to receive the full policy benefits regardless of the time duration of the claim after the policy holder’s death. In fact, during the time the benefits remain unclaimed, accrued interest is added to the basic unclaimed amount.
In case benefits remain unclaimed so that the insured would have reached the limiting age on the mortality table which is usually 100-115 years, the benefits may be considered legally abandoned. In such a case, the unclaimed funds convert to state property and escheat statutes. Even then, in most cases heirs reserve the right to reclaim the funds.
Term Life Policy
Unclaimed term life policies have more or less the same legal status as whole life policy. The only difference is that these policies are only for a selected number of years so the beneficiaries may or may not be entitled to the policy payout depending on the forfeiture clause defined at the time of purchase and whether the premiums were up to date.
How to find a lost life insurance policy
Most insurance companies consider it the responsibility of the beneficiaries to contact them in order to collect the policy benefits which is a flawed practice and the basic reason for millions of unclaimed life insurance policies in the country.
If you or someone around you wants to find out about a missing policy, here is how to approach the situation:
- Check with deceased’s employers since many companies offer group life insurance to employees. They should have a record of everything.
- Check the deceased’s personal documents and look for anything that can lead to the insurance company – telephone numbers, policy documents and/or the names of the insurance agents.
- Be on the lookout for deceased’s incoming mail for some period after the death and watch out for due premium notices or statements, which are sent monthly or annually depending on the insurance company.
- Banks, lenders, credit card companies and other financial service companies often offer free or low-cost life insurance policies. Check out the deceased’s financial documents to see if such a policy was in force.
- If all else fails and no record of a policy is found but you are sure that a policy was in place, contact the underwriters in your city/state directly. To narrow down underwriters, start with the most popular ones in your area.
Whether you have just discovered about lost insurance claims or many years have passed since the insured’s death, there are many legal ways to acquire the funds that you and other heirs of the deceased may be entitled to.