I have a follow up question. My father passed and left a small insurance policy. I sent the policy in to the company. They sent me a generic letter stating that it had expired or was cashed in which was ridiculous without providing any evidence. I have since then told them unless they provide me with some evidence--this is a large insurance company, I will contact my attorney general. I am resending a copy of the insurance policy but they told me they only have to keep records for 7 years. I am just wondering if this is some kind of "scam" where companies can buy policies then tell people they're expired. Any suggestions? Thanks.
You can contact the insurance commissioner/insurance department for the state that the company is in and file a formal complaint. The insurance department then contacts the insurance company and the insurance company is required to respond within a certain amount of time.
I've been working for an insurance company for over 23 years and we still have every file since the beginning, which is the early 1900's. But I do hear that some companies clear out the files after 7 years.
1. Read the policy provisions - especially those pertaining to the terms/length of time the policy will be in effect. That may provide some insight.
2. Go through your Dad's papers to see if he had been paying premiums on this policy (checks to that company)
3. If you still feel that there should be a payout (see other thoughts below) Put a letter in writing to the CEO and President of the company. Those letters are answered by higher level executives and typically have more information in them.
~~ I spent many years working in the life insurance industry. Here are some possibilities as to why there may be no benefit available. Many companies tried to trim their outstanding liabilities (regular reports, file maintenance, etc) by offering early payouts to holders of smaller policies. I know for example, my Mom got an offer while I was active as her POA -- the insurance company was looking to buy the policy out. I took it for her behalf and it was one less thing to deal with when she passed! The original policy was $1000 and the value with dividends had grown to slightly over $2000. The company got the liability and reporting off their books .
~~ Other policies are only for specific periods of time. So, a 10 year term policy would only cover the insured for 10 years from the date it was issued. If it was this type of policy, I believe the letter would have indicated that.
A number of larger companies went public over the last 20 years. In preparation for that, they did try to reduce their business by buying out the smaller policies. Perhaps your Dad's policy was in this category. A letter to the President/CEO should get you the date of termination and perhaps you can go through bank records to see if there is a record of a deposit for that amount.
~~ Alternatively, if Dad moved, maybe the company couldn't find him and turned over the value to the state of residence's unclaimed funds kitty. You can search on your state's website for that.
Hope this helps.