Unaccounted for life insurance easily traceable with new web tool

A state-of-the-art web tool is drawing praise from the insurance community and elsewhere.

Life insurers - and by extension, insurance agents - have an obligation to see to it that beneficiaries receive the proceeds they have coming to them upon a loved one's death. Insurers have the resources that have helped to make this possible, but frequently, the same cannot be said for consumers.

That is, until now.

In consultation with the National Conference of Insurance Legislators, the National Association of Insurance Commissioners recently released a brand new web tool that enables individuals to determine whether a deceased family member had a life insurance policy or annuity in effect while they were living. The appropriately titled Life Insurance Policy Locator can be accessed by going directly to NAIC's website, then filling in the appropriate information as prompted.

John M. Huff, NAIC president and director of insurance services in Missouri, indicated that at the very least, this tool will help loved ones save themselves time and energy thanks to being much more convenient.

"Our locator gives consumers the means to easily search for lost life insurance policies," Huff explained in a press release. "This national tool gives families and consumers a genuine time-saving option when trying to get their financial affairs in order. This locator leverages NAIC technology to help consumers collect what was promised by insurance contracts."

$1 billion yet to be claimed by beneficiaries
The inability to determine life insurance ownership isn't unusual. In fact, Consumer Reports analysis determined in 2013 found that roughly $1 billion in life insurance proceeds is still waiting to be claimed, the average payout being approximately $2,000. NAIC's web resource should help bridge that knowledge gap.

The Life Insurance Policy Locator was a long time in the making. Almost exactly five years ago, NCOIL overwhelmingly approved the passage of the Model Unclaimed Life Insurance Benefits Act.

"As evidenced in highly publicized state third-party audits and ongoing state regulator and treasurer investigations, there is a clear need to modernize industry practices concerning unclaimed life insurance benefits," Carroll Leavell, NCOIL president and senior senator from New Mexico," noted at the time. "

The review process involves comparing life insurance policies that are in effect with the Death Master File that is maintained by the U.S. Social Security Administration. Life insurers have long had this capability, but as Iowa Insurance Commissioner Nick Gerhart explained, family members of lost loved ones frequently don't know where their search should start. The Life Insurance Policy Locator affords them with a reliable launch point, and helps insurance professionals perform their roles more efficiently as well.

"This policy locator simplifies the process for consumers and insurance companies," Gerhart said.


Approximately $1 billion in proceeds is unclaimed by life insurance beneficiaries, according to analysis done by Consumer Reports. Approximately $1 billion in proceeds is unclaimed by life insurance beneficiaries, according to analysis done by Consumer Reports.

Beneficiaries have received $600 billion in proceeds since 2006
Typically, when insurers are unable to track down beneficiaries, the proceeds go to the state in which the life insurance policy was in effect. Several governorships have performed analysis into lost policies, including New York, Florida and California. Critics have gone so far as to blame life insurers for not doing more diligent job in tying up loose ends.

Dick Kempthorne, president and CEO of the American Council of Life Insurers, stressed that this has never been further from the truth, and certainly not now.

"Life insurers are going above and beyond the requirements of many state laws to link people with their benefits," Kempthorne said in reaction to the unveiling of the Lost Policy Locator Service. "In the past 10 years alone, life insurers have paid more than $600 billion to beneficiaries of life insurance policies. Keeping promises to the families who rely on these benefits is the cornerstone of our business. That's our purpose."

He added that NAIC's tool furthers life insurers' stated objectives as they pertain to connecting family members with lost loved ones.