Make Sure Death Claims Get Paid

There is a big financial difference between having a client with death benefits, and actually having death claims paid. It is your ethical responsibility as an insurance agent, commissions aside, to assist get the information so life insurance death benefits can be paid. Here is how you can help.

Unfortunately someone dies You know that they had life insurance, but what was the name of the company, and where is the policy? The policy is located but it bears the old name or address of the writing insurance company. But because the old address is more than a year old, the post office returns the information as undeliverable. You are back to where you first started.

The life insurance company is not automatically going to pay out a death claim. They are going to make zero effort on their end to see if the insured person died. There are not home office people reading all the obituaries and trying to trace them to their policy owners.

The burden of proof and collection of benefits rests on the named beneficiary. If a life policy goes unclaimed, the company can take cash value out of the policy to keep it going, or reduce the face value to pay premiums. Reducing the face value shrinks the amount that the beneficiary receives. It is possible for the policy to be canceled completely for premiums due that have not been paid. All goes to the present insurance company, unless you can track it down within a reasonable time period.

Make sure the insured knows the current name of the life insurance company insured with, and that any beneficiaries know about it also. An insurance company may have changed its name, location or ownership three times within the past 5 years. Remember that if your mail to the insurance company gets returned, your contact phone number to the insurance company probably will no longer exist. Also if the agent who sold the policy was in the business under 4 years, there is a 90% chance that he is no longer there.

Does a life insurance directory even exist on the Internet? After exhaustive searching using many search terms, it was not found. It would be great to just have a simple insurance directory of health, annuity, and active life insurance company headquarters. The information would showing the full name, the mailing address, and where possible a telephone number. With an insurance company Internet look up, the NAIC code is essential to know.

What is NAIC? It is something insurance agents are never taught. Nor do they take the time to learn the importance of “NAIC”. A field “NAIC” provides a code number to locate or identify an insurance company. Remember that when the life insurance company directory under type shows LIFE, the insurance company could specialize in life, annuity, or health insurance polices or all three. When the type shows FR that means a Fraternal Life company information is displayed. HIC under type refers to Health Insurance Corporation. Some companies are even harder to locate, as often they are not licensed in all states.

An NAIC code could be very handy if you have an attorney, who with this NAIC number should be able to back track down the company, and the parent company who NOW owns it. An agent delivering a life insurance policy should make sure that you write a note on the life insurance policy with the NAIC code. It could save a lot of frustration in the future. See how grateful people you see, have you note this code of life insurance policies sold by other agents. It projects you as knowledgeable and trustworthy, two high qualities that lead to additional sales.

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