|Decades ago, large underwriters like
Prudential, Metropolitan Life, and John Hancock pioneered
"Industrial Life Insurance" policies, also
known as "Burial insurance." Aggressive
marketing to the elderly poor made it a popular product.
In Florida alone, nearly one million policyholders are
entitled to collect benefits totaling three-quarters of a
These types of policies have a major flaw: they often don't contain a pay-off date. Policyholders pay indefinitely for a small, fixed benefit, typically $1-2,000. A National Association of Insurance Commissioners (NAIC) investigation found as many as half of all policyholders had made payments exceeding the value of benefits to be received.
Most underwriters have stopped selling these types of policies, but given the large numbers of policies outstanding and the long dormancy period before unpaid benefits are transferred to state unclaimed property offices, a proactive search is good idea. MetLife is holding $4.2 billion owed over 5 million lost policy beneficiaries. John Hancock hasn't sold burial policies since 1968 and declared all such policies "paid up" in 1985, but it is unable to find 400,000 industrial life policyholders owed $61.7 million.
Note many policy holders and heirs may be entitled to an unexpected windfall. As a growing number of mutual life insurance companies - including MetLife and John Hancock - convert to stock ownership, policyholders may be entitled to receive stock, policy credits or cash payments in addition to policy benefits. For assistance tracing a lost policy go to: Unclaimed Life Insurance Search
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