Insurance companies have failed to pay more than $1 billion in death benefits, Consumer Report announces citing its own estimates.
The average unclaimed life insurance benefit can make up $2,000 while some payouts can reach $300,000. According to the report, the probability that the U.S. citizen is designated as the beneficiary is 1:600.
The main reason why the beneficiary does not receive the money is the absence of information about occurrence of an insured event from the side of the company’s managers. In many cases the beneficiary does not know that he is entitled to receive the payout while the company, in its turn, cannot locate the beneficiary. The U.S. authorities tried to force the insurance companies to find the beneficiaries rather than wait for recipients to file claims. In the middle of 2011 the New York authorities initiated investigation which resulted in more than $650 million being paid to beneficiaries.