NBC News: Unclaimed Life Insurance Payouts Top $1 Billion

In this age of databases and search engines, it’s hard to imagine that anyone could be the beneficiary of a life insurance policy and not receive the money. But it happens all the time.

Consumer Reports investigated the problem of lost insurance policies for its February 2013 issue. They found there’s currently about $1 billion in life insurance benefits waiting to be claimed by beneficiaries.

“The average unclaimed life insurance benefit is $2,000, but some payouts have been as high as $300,000,” senior editor Jeff Blyskal told me.

The magazine calculated the odds that you are owed money from a lost, forgotten or unknown policy at about one in 600.

Why is this happening?

Insurance Sometimes it’s a communication problem. All too often, people buy life insurance and don’t let their beneficiaries know about it. But, Consumer Reports points a finger at the insurance industry.

“Over the years, insurance companies have not made much of an effort to find these people,” Blyskal said. “When one of their policy holders dies they don’t always go looking for the beneficiaries.”

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