The Office of the Treasurer in each state usually takes responsibility for the personal financial assets of people who die without a nominee to leave them to. Every state has billions in safekeeping – there are stocks, paychecks, jewelry made of precious metals and insurance policies.
When you see the insurance companies advertise their policies, it can be hard to imagine that to one out of four people, an insurance purchase is never of any use. While these people do put down the name of a beneficiary in their policies, the person named never gets the money.
People who buy insurance policies often simply neglect to tell their families about them. The beneficiary named never knows that there is a policy out there for him. If you plan to buy an insurance policy, it is an important step to make sure that someone is actually able to collect on it one day.
Informing the beneficiary
It is always a good idea to make a copy of your policy to give to the beneficiary named. If you don’t believe that the beneficiary is responsible enough to hang on to the copy, you can at least talk to them about it. To merely know that a policy does exist could make it easy for the beneficiary to put in a claim.
Most people (about 66% of the population) simply neglect to draw up a will. When you have a will, you can be sure that details about who gets the insurance payout and where the policy is physically stored are readily accessible.
You don’t need to keep a physical copy of your policy in a safe, either. You could merely use a service such as AfterSteps for all your assets. Your family can have one place to turn to for all your assets this way.
Making sure your policy is usable – ensuring that you are insuring the right person
It can be a good idea to make sure that the policy you’ve bought actually has the right personal information on it. Checking this is easy. You only need to turn to the Medical Information Bureau. This is a service that allows anyone to look up information on any life insurance policy.
It costs $75 to look up a policy that is in another person’s name. It’s free to look up a policy that you own yourself. The MIB even offers every policy holder a free yearly report – much the way the credit reporting bureaus do. Accessing this report once a year can assure you that no scammer out there has taken out a policy in your name.
Anyone who has someone in the family pass on could pay the $75 fee required in to order and MIB policy locator reports to see if they have any insurance money coming to them. Usually, though, it is the executor of the estate does this on his own.
What happens when you don’t tell the beneficiary named in your policy?
It could be years before the beneficiary in your policy hears about his insurance windfall. He may need to actually do Internet searches on websites like unclaimed.org – an industry resource run by the National Association of Unclaimed Property Administrators. Even if he doesn’t locate your policy, he may still need to see the death certificate and the Social Security number of the deceased. The bottom line is that if you wish to see your insurance policy actually be of some use to someone, you need to take care of these little details.