If no one finds your last will, life insurance policy, or trust after you’re gone, they are useless. A Consumer Reports study recently found that since 2013, more than $1 billion in benefits from life insurance policies have been unclaimed. Estimates show that 1 in 600 people are entitled to unclaimed benefits. Why put your beneficiaries in a position of missing out on what you’ve bequeathed to them? Take steps to ensure that all the important information needed in the event of your death is readily available, including the location of your will, trust, and details about your life insurance policy.
Beneficiaries are Often Unaware of Benefits
U.S. federal agencies, states, and other entities collectively hold unclaimed benefits and cash amounting to more than $58 billion. That figure includes life insurance money owed to heirs who aren’t aware their deceased loved one had a life insurance policy. Obviously, it’s a common problem that beneficiaries don’t know their deceased loved one made financial provisions for them. In many instances, all of the payments for policies were completely wasted and ultimately turned out to be useless, simply because of a lack of communication.
$97,000 in Unclaimed Benefits
Ted Martell’s mother died in 1999, and he had no idea that she had a life insurance policy. In 2014, he was tracked down in California and surprised with the news that he had $97,000 coming to him from his mom’s life insurance company. Martell said he felt his mom was blessing them with happiness and love; but he almost missed out on the inheritance, due to lack of knowledge.
$400,000 in Unclaimed Life Insurance Benefits
Scott Langbauer’s dad died in 2003. Twelve years later, in 2015, 40-year-old Langbauer of D.C. was informed that an insurance company owed him an astonishing $401,982. Up to that point, he had no idea his dad had a life insurance policy.
What Happens When Life Insurance Money is Unclaimed?
The normal procedure for claiming life insurance benefits after the death of the policyholder begins when the beneficiaries file a claim. If the life insurance policy is unknown to the beneficiaries or they forget about it, they sometimes never receive their money. Most states have laws directing insurers to seek out beneficiaries owed unclaimed money on life insurance policies. When a beneficiary cannot be found, the funds are turned over to whichever state the policyholder last lived in.
An Affordable Emergency Plan
The step so often missing in unclaimed benefits is informing loved ones they are the beneficiaries in a will, trust, or life insurance policy. It’s not enough to have these things. In the event that you are incapacitated or you die, someone needs to know where the information can be found. The documents themselves don’t contain all details needed to simplify things for your family members. Based on the experience of a Certified Estate and Trust Specialist, people responsible for the affairs of deceased loved ones usually scramble to try to figure out where documents are and how to handle a plethora of matters. An ideal resource to avoid this common problem is the Family Emergency Card. This affordable yet highly practical tool allows you to keep all pertinent information in one secure place. It’s important to inform loved ones about the resource, however.
If you create a family emergency plan, such as the one offered by the Family Emergency Card, your family will have everything they need, including the knowledge needed to claim their inheritance.
To document and centralize all your emergency information into one place click here
Contributing writer: Stephanie McHugh
About the Editor: Bryan Beeler is a Certified Estate and Trust Specialist