04/26/2016
http://www.cbsnews.com/news/60-minutes-viewers-call-foul-on-insurance-companies/
It is heart-breaking to think that any insurance benefits are left unclaimed and unpaid after the death of a loved one. The life insurance industry was exposed in a recent 60 Minutes episode for failing to pay death benefits on the basis the beneficiary never made a claim for the benefits. It is not surprising that beneficiaries don’t make claims on life insurance policies when they are unaware of the existence of the policy. What is surprising, even disturbing, is that life insurers refuse to pay benefits even though they are fully aware of the death of the insured, and even maintain information of that death in their own files. The insurers all rely upon what is known as a death master file for death information. However, the 60 Minutes episode revealed that millions of policies issued over the last thirty years were never paid. Insurers argue that the life insurance contract requires the beneficiary to present the policy and make a formal claim. On the contrary, various states have enacted legislation that requires insurers to investigate a claim if they are aware of the death of the insured. For that reason, 25 of the nation’s largest life insurers agreed to pay over $7.5 Billion directly to the beneficiary or to the state for failing to investigate a claim upon knowledge of the death of the insured. It does not appear that this sum includes compensation for the value of the loss of use of the benefits, but is simply the benefit amount required under the policy. Still, 35 insurance companies continue to refuse to pay benefits where no claim has been made.
This is an unfortunate scenario that detrimentally affects the widowed and survivors in a time when they are emotionally and financially vulnerable. If this has happened to you or your loved ones, file a claim with the state department of insurance and/or seek assistance from a qualified insurance attorney.
Life insurance companies and angry customers go back and forth via Twitter about unpaid claims, after watching 60 Minutes broadcast
