| 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
billion dollars. 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
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