The Unclaimed Life Insurance Benefits Act is a resolution passed by the National Conference of Insurance Legislators that requires insurers to aid beneficiaries of life insurance policies to claim their benefits, according to Keane. NCOIL provides the resolution as a model law, which individual states can adopt as legislation.Continue Reading
Many beneficiaries are responsible for making a formal claim to collect the funds owed to them by a life insurance policy, states the ABA Journal. The Unclaimed Life Insurance Benefits Act passes that responsibility to the insurer, making insurance providers cross reference policyholder names with death databases.
The act requires insurers to use information from the Social Security Administration to identify and confirm the death of a life insurance policyholder, according to Keane. Insurers must also make a good-faith effort to find beneficiaries and provide claim forms and instructions so the beneficiaries can claim their benefits. If insurers cannot find a beneficiary, or someone does not claim a benefit, the act directs insurers to notify state treasury departments, which can receive the funds.
As of early 2015, 15 states passed laws based on the Unclaimed Life Insurance Benefits Act. State laws based on the act apply retroactively to existing insurance policies, according to Unclaimed Property Recovery and Reporting.Learn more about Insurance