Locating Beneficiary(ies)

​Working in life insurance claims, we can all agree that there is one universal truth:  We exist to fulfill our promises to pay out according to our customers’ wishes in the form of benefits as quickly as possible.

While many claims are successfully paid to beneficiaries, we have all experienced situations where a beneficiary cannot be located, and the funds are eventually escheated to the state as unclaimed property.  By some estimates, over $1 billion in life insurance benefits have been unclaimed in the U.S. alone.

Where do the funds go when the beneficiary cannot be located or does not initiate a claim?  The benefits (property) are held by the insurance company for a period of time known as a “dormancy period” until the amount of time is reached in which they must be escheated (turned over) to the appropriate state treasury department.  Each state has its own dormancy period, typically between 3-5 years.  The following resource allows you to search by first and last name to see if there’s any unclaimed property record(s) for an individual, or if you feel lucky, try searching for your own name:  https://www.missingmoney.com

Insurance regulations have taken a closer look at insurance company practices in the handling of unclaimed property.  In 2011, the National Conference of Insurance Legislators (NCOIL) created the Unclaimed Life Insurance Benefits Act, which standardized procedures for unclaimed policies and required insurers to periodically check the Social Security Administration’s Death Master File database to identify deceased policyholders and begin the claims process with their beneficiaries.  As a result, insurance companies may find themselves on the invite list to participate in unclaimed property audits and reviewing their procedures on handling of unclaimed property.  Periodically, a number of states make updates and revisions to their unclaimed property statutes.

What can claims personnel do to ensure compliance with unclaimed property regulations?  Read on below to find out.

Practical Strategies to Help You Locate a Beneficiary

Perform thorough file review and research first! Know who you’re looking for and who is associated with them; look for information internally, for example, do they hold other lines of business at your company, e.g. auto, home, or health coverage? Is there an active agent, fiduciary, or other financial representative on the policy?  If there are other beneficiaries, would they be of assistance in providing contact information?  The funeral home that handled the policy owner’s arrangements is also a good starting point.

Start With Basic, Free Resources:  Utilize online phone book “white pages”, advanced search engine techniques, social media pages or professional networking sites.  Often times, you can find online voter records or use a funeral home’s online obituary guestbook and tribute wall as a source in sleuthing for evidence in locating the beneficiary.
Arrest records and resources are also publicly available online, which can be helpful in locating a beneficiary that has been incarcerated.

Send Locator Letter(s) to addresses found through your careful and diligent research. Make sure that you have pinpointed potential current addresses associated with your beneficiary.  Your locator letter should be professional in appearance and approach; do not go into details about the policy or the dollar value of benefits, but rather, strive to be clear that the beneficiary’s action is required to proceed with the claim. Consider using trackable methods, i.e. overnight signature required, or certified mail delivery.  Note:  you might consider neatly writing (or stamping) phrases on the envelope such as “Important, Please Read”, or “Your Response Required” to get the attention of the recipient.

Undeliverable Mail is not Junk Mail!  Look through the policy file for evidence of undeliverable mail (aka returned mail) and any clues to see if customer has moved, or, if there are any clues that they are possibly “deceased” as indicated on any returned correspondence by the postal service.

Call, Call, and Call!  Make diligent efforts at establishing contact via phone –If the beneficiary is elderly, you may find local Elder Services and resource offices that will be willing to assist; if the beneficiary is not yet retired, and you’ve pinpointed a possible place of employment through savvy research, the human resources office at their company may be an option to contact.

Keep a Record and document each attempt you make to locate a beneficiary. You’ll want this information in the file to document what you’ve done to locate the individual. Should more information become available later online or elsewhere, you may be able to take a fresh look at the case and eventually solve it.

When you’ve exhausted your free online resources, it may be time to enlist the usage of reputable, online pay-for-records services such as: obituary vendors, consumer reporting agencies, genealogy sites, historical newspaper sites, and state vital record vendors to supplement and sharpen your research technique.

No Scams! When you’ve located your beneficiary, be able to clearly substantiate who you are and why you are trying to contact them, especially when they hear they may be entitled to monetary benefits – the beneficiary may be overwhelmed (with joy or confusion) just as you may feel if you received the same news!  Offer the beneficiary various ways to contact you and the company you’re calling from by phone, mail, email, and fax.
Offer appropriate forms of payment options to the beneficiary – Even in the digital age, not everyone has a bank account, or you might run into a small estate or minor beneficiary situation – be ready to explain options for how the beneficiary can claim their payment.

Be aware of state dormancy periods and when you as the insurer, must turn the property over to the state treasurer. There comes a time where you have exhausted and documented all your efforts but decide to call it quits on the search for a beneficiary, or, you may decide enlisting the help of an outside investigator, is an option.  Being aware of when the funds must be escheated to the estate will be key in how much time remains in solving the case.

Inject creativity and have a little fun in honing your investigation technique. As a claims professional, make it your personal duty in delivering the final promise to the beneficiary.  Consider tracking the amount of progress you or your team has made in the number of cases handled and amount of benefits claimed; you’ll be surprised at how rewarding it can be to look back on all the cases you’ve helped to resolve.   Regularly highlight success stories with teams and your leadership on what you’re doing to fulfill the promise of life insurance!

I’ll end this blog with one recent success story of my own.  We had a $50k unclaimed life insurance benefit.  Our beneficiary was a young girl who we could not locate but saw indicators of arrest records and incarceration.  We sent a letter to the jail facility in hopes it would reach her.  Unfortunately, that lead did not yield a response, and so we held the case for some time in case any new information would become available. Several months later, we received a call from the beneficiary indicating she had been released, but was now homeless with her new baby boy.  We arranged to overnight forms to an address of a friend of hers, which she then completed and returned to us along with a death certificate.  We were able to pay the claim and she later called to tell us the enormous impact it had in getting care and shelter for her and her child.

I hope you were able to find a few takeaways from reading this blog and always appreciate hearing from others and exchanging ideas for best practices.  If you have questions or would like to discuss further, I can be reached at: [email protected]