Your brother just passed away and you have a life insurance policy in your hands. It is giving you some comfort that he did tell you about it just before he passed away; however, the phone numbers on the policy are wrong, the address is no longer available and the company is no longer in business. You are now lost. Where do you go? Who do you call? What are your options?
According to law an insurance company cannot just close its doors and walk away. It must be taken over by another insurance company or by the government. Once in the hands of the government they determine the situation of the company and reassign it to another life insurance company.
The only problem with that is when company “A” takes over company “B’ they can be very picky. They do not have to take all policies and assets of a company can be distributed to not only one company but several. Also, the companies only take over active policies. For example, if you had a term policy with company ‘B’ and the insured person passed away during that term the beneficiaries would be eligible for the death benefit. However; if it was, for example, a 10 year term policy and it ran its course before company “A” bought out company “B”, company “A” has no obligation to take it over. So it would be lost.
It is so important to first of all, keep all your life insurance information on a central database so it can be claimed quickly. With all the mergers and takeovers these days you will be glad your beneficiaries will have a central database to search.
It is also good to know how to find out what company took over the old company. There are services that do this for you. Now it is very important to know, no one can guarantee the new company has possession of your life insurance policy, but they should guarantee the company name they give you has taken over the old one you are looking for.
Prevent lost life insurance and guarantee your beneficiaries will find it when the time comes. Claim it quickly so you will not be part of the merger/ takeover shuffle.
Until next time Michael Hartmann
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“To be the best in serving our members by providing peace of mind that their beneficiaries receive their inheritance”