Tuesday, 10 January 2012
Beneficiaries Of Lost Life Insurance Policies Face Tougher Task
Many people who are owed life insurance benefits may find it harder to collect what’s owed to them in the future. This is because the Death Master File, which is put together by the SSA (Social Security Administration), will be harder for the public to access.
The file lists most Americans who have passed away during the past 75 years and includes personal information such as Social Security numbers and ZIP codes. Insurance companies used this list to find out if any of their policyholders had died and would then pay out the benefits to the beneficiary. At least that’s what they were supposed to do.
According to an article by insure.com, insurance regulators in California, New York, and Florida recently said that many insurance providers hadn’t been using the file and beneficiaries were faced with the task of hunting them down to receive the money that was rightfully owed to them. Kevin McCarty, the Florida Insurance Commissioner, said insurance companies had $1 billion of beneficiaries’ money and could have easily paid it out if they checked with the Death Master File.
But it may even be harder for beneficiaries to collect now since the SSA started protecting this file on Nov. 1, 2011 and the majority of it can now be accessed by federal agencies only. This means the insurance companies and public won’t have access to the list of most recent deaths. The SSA said the system was changed because it isn’t allowed to publish death records it receives from the states. But this seems odd to many people since the file has been around since about 1980 and it surely didn’t take 30 years to find out they were doing something wrong.
It’s believed the file may be harder to access now because criminals were using it to gain personal information that could be used in illegal scams, such as falsely claiming deceased children as dependents. However, insurance regulators say the insurance companies should still be using the Death Master File even if it’s just a partial list now.
It’s recommended that if you have a life insurance policy you should make sure the beneficiaries know about it and where it’s located. And if you ever move, you should make sure the insurance company has your new address.
