Florida’s Unclaimed Life Insurance Flourishes Above All States
Unclaimed life insurance has been increasing unclaimed money funds, especially in states like Florida, who are known for retirement locations. Beyond the belief of a majority of Americans, unclaimed money owing to life insurance is more common than not.
According to verifiable reports, more than twenty percent of life insurance policies become lost life insurance and are turned over to state unclaimed money departments. Most of the original owners of life insurance policies often are ignorant about such a policy or fail to redeem the policy. Insurance companies, NAUPA and state treasuries have agreed that lost or unredeemed life insurance policies are a major source of unclaimed money in the state treasuries.
Florida has about 9.9 million unclaimed accounts, including securities and other property, in addition to insurance, worth more than $1 billion. Of that, some $355 million is related to unclaimed insurance, said Alexis Lambert, spokeswoman for the Florida Department of Financial Services.
In spite of the launching the best awareness campaigns for a better understanding of the unclaimed life insurance policies, millions of dollars in life insurance goes unclaimed each year for one simple reason: the beneficiaries do not know the money exists. Insurance companies are at a complete loss when it comes to locating the owners of the unclaimed insurance policies, even with the most modern information network and the power of internet at their disposal.
Like any other government or privately managed public money, life insurance policies also have an escheatment period. The policy money cannot remain unclaimed for an indefinite period of time and is eventually transferred to state unclaimed property divisions. And the states then post the information on web sites or in local newspapers. In some cases, the process of claim and actual ownership might take more than ten years, and the major beneficiaries from this policy money are the state and the insurance companies.
Every state has a different escheatment policy and timeframe for the insurance money to be considered unclaimed money. In most cases, insurance companies have two to seven years from the date a policy is deemed inactive to transfer the money to the state treasury.
“Life insurers make every effort to locate beneficiaries of life insurance policies,” said Whit Cornman, spokesman for the American Council of Life Insurers, a trade group. “Many companies have units dedicated to dealing with unclaimed proceeds.”
