Millions in life insurance goes unclaimed each year

Apr 14, 2011

Life insurance policyholders should be sure their beneficiaries that the plane exists.

While people commonly buy life insurance as a way of providing for loved one's after their death, the New York Times reports that a staggering amount of polices go unclaimed in the U.S. each year.

Hundreds of millions of dollars worth of life insurance plans go unclaimed each year, usually because the beneficiaries don't know they exist. The paper said if a policy isn't claimed and the insurance company cannot locate the beneficiary, the money will eventually be transferred to state unclaimed property divisions. The state will then post the information on websites and local newspapers in an attempt to find the beneficiary, reported the source.

New York alone has received approximately $400 million in unclaimed life insurance property since 2000, but has only been able to pay out $64 million. The Office of the State Comptroller told the newspaper that only about 20 percent of property is claimed in a given year.

Some people are still fighting for unclaimed life insurance policies that are decades old. The Miami Herald reported that a group of South Florida Holocaust survivors have fought for legislation that would allow them to sue European insurance companies for unpaid claims. 

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