Unclaimed life insurance: Are you owed a payout?

FOX19 - Insurance companies are sitting on an estimated $7 billion in unclaimed life insurance benefits – and some of it could belong to you.

Studies show one out of every 600 people in America is owed a chunk of that unclaimed money.

Simply Money President Ed Finke says insurance companies haven't done nearly enough to track down beneficiaries of unclaimed life insurance policies.

"They've had an incentive for a long time not to do that, because the longer, and this is capitalism, the longer they hang onto that money without paying it off, the better it is for them, the better for shareholders," Finke said.

Life insurance is supposed to pay a beneficiary money once the policyholder dies. But here's where things get tricky: Until recently, there was no law forcing insurance companies to track down beneficiaries after the policyholders passed away.

People who didn't know they'd been listed as a beneficiary, in turn, didn't know to follow the process.

In recent years, dozens of states sued insurance companies over this issue and a settlement was supposed to force insurers to work harder to notify beneficiaries.

Many states, including Ohio, now provide free help to people trying to locate those unclaimed benefits, but you have to fill out the right forms first.

Finke and other financial experts say many people need to do a better job of letting loved ones know about their life insurance.

"You gotta let somebody know, let the executor of your estate know, let your attorney know, let your financial advisor know, at the very least, write it down, put it with your records where it will be easily accessible in the event of your death," said Finke.

The Simply Money point: The average unclaimed life insurance benefit is more than two thousand dollars, but some of those unclaimed accounts are worth more than a million bucks. That makes it worth taking a few minutes to search for any benefits in your name.

Click here to search for unclaimed benefits in Indiana

Click here to search for unclaimed benefits in Ohio


Search for unclaimed money in Ohio

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