Understanding Life Insurance Claims
Life insurance helps to ensure the financial stability of the heirs after the policyholder’s demise. Unfortunately, most policies become unclaimed owing to ignorance, loss of documents, or otherwise. This piece examines what is done if beneficiary does not claim life insurance and how to avoid losing those monies.
What Happens to Unclaimed Life Insurance?
In the event that a life insurance benefit is not taken by the beneficiary, the said money stays with the company for some time. When an unclaimed policy continues to be in company possession beyond that time, the money goes to the unclaimed property department of the state.
Common Reasons Beneficiaries Don’t Claim Insurance
- Absence of awareness of when claims will eventually become payable
- Claims may take years or months leading to lost policies
- Beneficiaries are not informed about their status
- Misleading or outdated information about the beneficiary.
- Believing it is automatic to get a claim.
How to Prevent Life Insurance Claims from Going Unclaimed
Make sure policy documents are safe and easily accessible.
Inform policy information to beneficiaries.
Periodically update beneficiary details.
Use online resources to monitor policy details.