Unclaimed insurance cash is in the billions

A number of people don't know that they may be the beneficiary of a life insurance plan. Also, a lot of people aren't the simplest to discover. Consequently, hundreds of millions of dollars in unclaimed insurance money is just sitting around, waiting for a beneficiary to hold up their hand. Resource for this article: Why not check out Personal Money Network?

AIG returns $300 million to states in unclaimed insurance cash

Believe it or not, there really is a lot of unclaimed cash floating around. Apart from the millions in tax refunds that go unclaimed and un-cashed every year, there is also a boatload of unclaimed insurance cash and a great deal in unclaimed life insurance plans.

For instance, according to the Huffington Post, AIG recently reached a settlement that will send $300 million to 39 states and Washington D.C., all from unclaimed life insurance policies that had yet to be disbursed to the recipients. The $300 million payment follows an $11 million settlement that American International Group reached with various state insurance regulators.

Normally, life insurance companies are required to check the Social Security Death index to see if cash needs to get paid out regularly, but AIG was not doing that. That meant recipients had no idea they were supposed to get money.

Not by yourself

American International Group was not alone in not paying out unclaimed insurance money. Comparable settlements were also made recently by MetLife, Prudential and Nationwide, with Nationwide agreeing to pay out $7.2 million to regulators.

If insurance cash is not claimed after a certain amount of time, federal law provides that the funds are held in the respective state the policy holder or last known beneficiary resides in. If they can find the beneficiaries, said recipients can cash in. Beneficiaries don't always know to look and states don't always try too difficult to find them, either.

Every state uses the money rather than keeping it, which is why they do not try very hard.

Not claiming a ton of it

Many people don't get just how much unclaimed property there is, particularly unclaimed money including unclaimed insurance cash. The Department of Veterans Affairs, according to ABC, has unclaimed life insurance cash owed to surviving spouses and family of service members, in total more than $33 million unclaimed. Some of the unclaimed disbursements date to World War I. Most are from World War II.

Since 2000, Brand new York State has taken over $400 million in life insurance cash that was unclaimed and has paid out less than $65 million of it, according to the New York Times. Of the $10.5 billion the state has received since 1943 in unclaimed cash, the state has only paid 20 percent of it. There are billions of dollars just sitting out there. People do not even realize they can claim it. Florida has over a billion in unclaimed money, such as over $335 million in unclaimed life insurance money.

Sources

Huffington Post

ABC

New York Times