State Treasurer John Perdue says an Ona woman’s filing of an unclaimed property claim illustrates why insurance companies should pay benefits to beneficiaries without being asked.
Perdue was meeting recently with Unclaimed Property Division staff members when he noticed two life insurance policies – the legal instruments themselves -- being prepared for mailing. The Cabell County woman had filed a claim for safe deposit box contents, which were advertised on the Treasurer’s website.
Two life insurance policies were in the box – a $25,000 policy for a relative and a $10,000 policy for the woman herself.
“I’ve said this before in litigation and in the recent legislative deliberations about insurance companies’ roles in reporting unclaimed property,” Treasurer Perdue said. “Safe deposit boxes are often where life insurance policies themselves go to die.”
The Treasurer is drawing attention to orphaned insurance policies in light of the news magazine show “60 Minutes” Sunday telecast. The show highlighted a West Virginia man who received his mother’s life insurance benefits years after he had gone to the expense of burying her.
In the Ona woman’s case she may have known what was in the box, the Treasurer acknowledged, and had her memory jogged by seeing it listed. But the Treasurer’s Office is holding approximately 1,500 life insurance policies gleaned from safe deposit boxes. All are advertised, either on the Treasurer’s website or by two publications which come out each year.
Nevertheless, despite the office’s best intentions to find the rightful owners, many of the policies languish. It is much more desirable, the Treasurer said, for companies to follow a just-passed law which orders companies to determine if the insured is deceased and issue the beneficiary a check. That process would circumvent the policy becoming unclaimed.
“We came into all these policies through safe deposit box forfeitures,” the Treasurer said. “No, we do not know if all the premiums are paid up or if those insured are actually deceased. But this particular policy was taken out in 1973. That’s 43 years ago. The possibility certainly exists that the policy is payable.”
Treasurer Perdue last year won an important state Supreme Court victory when the court remanded by unanimous vote a case back to a Putnam County circuit judge. The judge ruled insurance companies were not responsible for paying out policies if a claim had not been filed.
“How can you file a claim if you don’t know the policy exists?” the Treasurer asked. “That’s the definition of unclaimed property – financial assets from which you have become separated.””
The court ordered that Social Security’s official Death Master File be searched and policies paid if the insured is deceased. The Legislature reaffirmed the high court’s intentions when it passed a bill this past session ordering the same basic steps.
The deadline for insurance companies to report unclaimed policies is May 1. So far, Perdue said, there has not been an avalanche of unclaimed policies rolling in. That could be a good thing, the Treasurer said, if it signals that companies are determining which insured people are deceased and timely mailing checks straight to their beneficiaries.“I sincerely hope that we see a future change in how things are done,” he said.