Recently, a law was passed in Florida aimed at helping ensure beneficiaries of life insurance policies get benefits they are entitled to in a timely manner after policyholders pass away.
Among the things that could cause a beneficiary to not get such benefits in a timely manner is them not being aware that a deceased loved one had a life insurance policy.
The new law, which was signed by the governor last month, puts some requirements in place regarding what life insurance companies have to do after discovering that a policyholder had died. Among these requirements is a mandate to take efforts to locate and notify beneficiaries within 120 days of making such a discovery. If an insurance company is unsuccessful in its search for a policy's beneficiaries, it is then to transfer unclaimed life insurance proceeds to the state government and the government is to continue search efforts.
Additionally, the law puts certain requirements on insurance companies regarding monitoring whether policyholders have passed away.
Do you think this new law will reduce the occurrence of life insurance benefits payouts not being made or being significantly delayed due to beneficiaries being unaware of the existence of a policy? What overall effects do you think the new law will have?
Now, a beneficiary not being aware of a life insurance policy is not the only situation in which a lack of benefits payouts could occur. Sometimes, a beneficiary makes a claim for life insurance benefits after a policyholder's death, but their claim is denied. There are a variety of grounds life insurance companies might assert when denying a claim. Instances can occur where denials are made for inaccurate or invalid reasons. When a beneficiary of a life insurance policy feels that a benefit denial issued in relation to a life insurance claim they made was inaccurate and unfair, they may want to have a discussion with an attorney skilled in insurance issues about whether they have any viable options for contesting the denial.
Source: Orlando Sentinel, "New law forces life insurers to find, pay more beneficiaries," Susan Jacobson, April 22, 2016