As much as people don’t like insurance companies, well, here’s one more reason. I should be talking about all the reasons to like and trust them, but when they intentionally try to get out of doing the right thing, they are fair game. There is a thing in the government called the death list. They use the list which is processed through social security numbers and names to make sure they don’t keep paying social security benefits to deceased people. This is a public list.
Life insurance companies regularly use this list to make sure, as the government does, that when a person dies they can stop paying annuity benefits. Fair enough right? After all paying out money that isn’t due is just against all real logic.
But this logic fails when life insurance company computers aren’t used to connect to the death list to see who has died and not filed a life insurance death claim. Not filing a claim is a common occurrence because the beneficiary doesn’t know about the policy, the primary beneficiary is dead or since the primary beneficiary didn’t know or predeceased the insurance. This doesn’t mean the life insurance benefit isn’t still owed to the contingent beneficiary or the estate. It does mean that the life insurance companies have fallen short of the logic of paying what is due. With all due respect for those companies who didn’t practice this intentional ignorance, let me say that those that did were big name companies who had the ability to follow this list easily and shamefully turned a blind eye to that possibility.
Thankfully someone caught on to this flagrant dereliction of good practices and took these big boys to court and won. Now the companies in question are being forced to no only use the SS death list going forward for life insurance, but have been ordered to go back and find those that have been missed and contact the families and make things right. Again, as much as I believe in life insurance and the companies that provide it, it just makes me happy to see these big boys of the industry get spanked over this whole sham.
Bottom line. This isn’t new news and one would hope that the problem is under control now, but we’re dealing with major corporate America and, at least in my mind, all the greed that comes with it, so America beware. If you have any questions please call or email me directly. My name is Ed Hinerman. Let’s talk.