The death of a loved one is a stressful and emotional time. When you know that the deceased had life insurance but can’t find the policy, it can create additional confusion and delay in receiving the death benefits. Unfortunately, this is a situation that many beneficiaries face, and in some cases, insurance companies take advantage of the delay.
Life insurance companies have a duty to pay out death benefits to beneficiaries promptly. However, if a claim is not filed, some companies have been known to simply retain the funds, holding onto the money and collecting interest in the meantime. This issue has led to significant settlements, with insurers now facing accountability for failing to promptly pay out death benefits.
Life Insurance Companies Holding on to Millions of Dollars
When a policyholder passes away, beneficiaries are typically entitled to receive the death benefits outlined in the life insurance policy. Unfortunately, if no claim is filed, the insurer may hold onto the funds instead of making the payment. This practice has raised serious concerns, especially when beneficiaries aren’t aware that they are entitled to the money.
In recent years, large life insurance companies like MetLife, Prudential, and John Hancock have been under scrutiny for failing to track policyholders' deaths and for delaying or failing to pay out benefits. These companies have been accused of simply holding onto the death benefits instead of issuing them to the rightful beneficiaries.
In one notable case, MetLife agreed to a settlement in which they committed to paying nearly $500 million to beneficiaries in over 30 states. This settlement was part of a larger effort to hold life insurers accountable for failing to pay out life insurance claims in a timely manner. The total amount of money expected to be paid out by MetLife, Prudential, and John Hancock is expected to exceed $1 billion.
Why Life Insurance Claims Are Delayed or Unpaid
Insurance companies have a financial incentive to delay or avoid paying out life insurance claims. If no claim is filed, insurers simply hold onto the funds and earn interest on the money. Some companies also fail to proactively search for beneficiaries when policyholders pass away. This can occur for various reasons, including:
Unaware Beneficiaries: Often, beneficiaries are unaware of the existence of a life insurance policy. They may not know where the policy is stored or which insurance company issued it.
Failure to File a Claim: Without filing a claim, the insurer has no incentive to pay out the death benefits.
Policyholder’s Death Not Reported: If the insurance company does not receive notification of the policyholder’s death, they may not take any action to pay the death benefit.
When these situations occur, insurance companies are able to profit from the delay and retention of funds that rightfully belong to the beneficiaries. This practice has led to regulatory scrutiny and settlements with some of the largest life insurers in the country.
How You Can Still Claim the Death Benefits
If your loved one passed away and you know they were insured, but you are unable to locate the life insurance policy, you still have options. Even if no claim has been filed, you may be entitled to the death benefits. It is crucial to investigate the life insurance policy, and an experienced life insurance lawyer can help you with this process.
Steps to take if you are missing a life insurance policy:
Search for Documentation: Start by looking for any related documents, such as premium payment notices, tax records, or bank statements that might indicate which insurance company issued the policy.
Contact the Employer: If the policy was provided through the deceased's employer, their human resources department may be able to help you locate the policy.
Use the National Life Insurance Policy Locator: The National Association of Insurance Commissioners (NAIC) offers a free online tool that can help you locate lost life insurance policies.
Hire a Life Insurance Lawyer: If you're still unable to locate the policy or if the insurance company is delaying payment, a life insurance attorney can help you navigate the legal process and ensure you receive the benefits you're entitled to.
Don’t Wait—Act Quickly to Claim Your Benefits
It’s important to act quickly if you suspect your loved one had a life insurance policy but the claim was never filed. If the insurer has not paid out the claim, there may still be time to recover the money due to you. The sooner you act, the better the chances of resolving the issue and receiving the death benefits without further delay.
If you find yourself in this situation, it is in your best interest to consult with a life insurance lawyer who specializes in claims recovery. Our firm has extensive experience handling life insurance claims, including those that have been delayed or denied. We’ve helped thousands of families recover the death benefits they deserve, and we can help you too.
The Importance of Holding Insurers Accountable
The settlements reached by MetLife, Prudential, and John Hancock represent just the tip of the iceberg. The unfortunate reality is that life insurance companies regularly benefit from retaining funds they should pay out to beneficiaries. Holding these companies accountable ensures that future beneficiaries don’t face the same struggles.
If you believe you are entitled to life insurance benefits that have been delayed or denied, don’t give up. Our experienced legal team is here to help. Call us today to start the process of recovering the money that is rightfully yours.