Courtesy of http://www.iii.org/article/unclaimed-life-insurance-benefits

3. The life insurance company might not be able to find the policy’s beneficiaries (legitimate claimants).
There might be one or both of two problems in this scenario. The first is that the descriptions of the beneficiaries might be insufficiently precise for the life insurance company to locate them. This would be the case, for example, if the beneficiary designation says “my wife” or “my children” without naming them specifically and, ideally, providing a Social Security number and a current address for each one.

Be sure to provide detailed personal identification information about every beneficiary to each life insurer from whom you have coverage for death benefits so that, when the time comes, they can be easily located and their identity confirmed.

The other problem is that, even if the company knows who it is looking for, it may be very difficult to track down a beneficiary, especially as it may be many years, or even decades, since the policy was taken out. Keep in mind that, for privacy reasons, until the death occurs, the life insurer cannot even respond to a beneficiary’s inquiry as to whether they are a beneficiary or not.

4. Beneficiaries might not know that a life insurance policy exists under which they are beneficiaries.
It may come as a surprise, but sometimes beneficiaries do not know that they are covered by the insured’s individual or group life insurance policy. The insured may have a variety of reasons for keeping this information secret from the beneficiaries, but an unfortunate consequence is that the benefits could end up unclaimed because no one actually realized that they could make a claim. It is wise to tell the beneficiaries of your life insurance (both individual policies and group coverages) that when you die they will be entitled to death benefits. Also provide them with the name and home city and state of the life insurance company and the policy number.

5. The original life insurance company no longer exists (it might have merged, changed its name, moved to another state) and cannot be located by the insured, owner or beneficiaries.
The name of the company that sold the original life insurance policy may have changed, possibly making it more difficult for the beneficiary to locate the insurer in order to make a claim. Life insurance companies are not any different from companies in any other industry in this respect—but the multi-decade length of the contract can transform this type of normal corporate development into an extra hurdle for beneficiaries. Some will not know where or how to look for the new insurer, leaving the benefits unclaimed when the insured dies.

Typically, an insurer that is changing its name or location will notify its policyholders of such a change. Keeping a record of any notices regarding changes to the name, location or contact information for your life insurance company, will make it easier for your beneficiaries to make a claim.
If a family member dies and you are unable to locate his or her life insurance policy, we have tips available: How can I locate a lost life insurance policy?

Courtesy of http://www.iii.org/article/unclaimed-life-insurance-benefits

Sometimes life insurance benefits are left unclaimed after a policyholder dies. This is an unfortunate problem under any circumstances, but especially now, when many people are struggling financially. What is more, this is an easily preventable outcome.

To ensure that your life insurance benefits do not go unclaimed it is important to understand why this might happen. There are five major reasons; we will examine each in turn.

1. The life insurance company and the policy’s owner and/or insured might have lost track of each other.
The main mode of contact between you and financial institutions (banks, credit card companies, insurance companies, investment management companies, etc.) is by “snail” mail. As with anyone with whom you wish to keep in contact after you move, you must tell them your new mailing address or they will lose track of you. The U.S. Post Office will only forward first-class mail for a year to a forwarding address, and the sender is not aware that the mail is being forwarded to a new address as the Post Office does not inform the financial institution of the change. So if you move you should immediately inform every financial institution directly of your new mailing address, including your life insurer(s).

Of course, the same principle applies to other forms of communication: tell the life insurance company of new phone numbers (cell and land line), email address, fax number, etc.

2. The life insurance company might not know that the insured has died.
Life insurance companies typically do not know when a policyholder dies until they are informed of his or her death, usually by the policy’s beneficiary. Even if a policy is in a premium-paying stage and the payments stop, the insurance company has no reason to assume that the insured has died.

Moreover, there are policies that have benefits called cash values, with an Automatic Premium Loan (APL) feature. An APL policy borrows money from the cash value to pay a premium due if the money does not come in by the end of the grace period; thus preventing an unintended lapse of the policy, which would have the disastrous effect of loss of the entire death benefit should the insured die after premiums due were not paid. Under an APL, the policy would continue in full force until all of the cash value had been borrowed, at which time it would lapse.

Also, many policies are in a stage in which no premiums are due. Some life insurance is bought with a single premium or a small number of premiums due (such as 10 or 20 annual payments), but the insured might live a long time after the premium payments end. Thus the life insurance company would stop sending premium notices after all premiums were paid.

Moreover, there is no master list of who is alive and who is dead. The Social Security Administration has the closest thing to such a list—a file on its income beneficiaries (those receiving retirement or disability income from Social Security) to record those who are alive and who have deceased, so as to avoid making payments that are not legitimate—but this does not cover everyone. Millions of people, in fact, are not covered by Social Security (federal employees, state employees in four states, railroad employees, etc.), and therefore would not appear on this list.

Employers who sponsor group life insurance to active employees will notify the life insurer if a covered employee dies. And, it is possible that the deceased would also have individual life insurance policies with the same company that issues the group policy, but this becomes less likely when people switch jobs but do not switch individual life insurers. So remember to provide your beneficiaries with the name of, and contact information for, your life insurance company, so they can report your death and file a claim. to be continued…

Standard homeowners and renters insurance does not cover flood damage. Flood coverage, however, is available in the form of a separate policy both from the National Flood Insurance Program – NFIP (888-379-9531) and from a few private insurers.

The NFIP provides coverage for up to $250,000 for the structure of the home and $100,000 for personal possessions. The NFIP policy provides replacement cost coverage for the structure of your home, but only actual cash value coverage for your possessions. Replacement cost coverage pays to rebuild your home as it was before the damage. Actual cash value is replacement cost coverage minus depreciation so that the older your possessions are, the less you will get if they are damaged. There may also be limits on coverage for furniture and other belongings stored in your basement.

Flood insurance is available for renters as well as homeowners. You will need flood insurance if you live in a designated flood zone. But flooding can also occur in inland areas and away from major rivers. Consider buying a flood insurance policy if your house could be flooded by melting snow, an overflowing creek or pond or water running down a steep hill. Don’t wait for a flood season warning on the evening news to buy a policy—there is a 30-day waiting period before the coverage takes effect.

Excess flood insurance is also available from some private insurers for those who need additional insurance protection over and above the basic policy or whose community does not participate in the NFIP. Depending on the amount of coverage purchased, an excess flood insurance policy will cover damage above the limits of the federal program on the same basis as the federal program—replacement cost for the structure and actual cash value for the contents.

Excess flood insurance is available in all parts of the country—in high risk flood zones along the coast and close to major rivers as well as in areas of lower risk—wherever the federal program is available. It can be purchased from specialized companies through independent insurance agents, or from regular homeowners insurance companies that have arrangements with a specialized insurer to provide coverage to their policyholders.

Courtesy of http://www.iii.org/press-release/spring-is-motorcycle-season-and-time-to-check-your-bike-has-the-right-insurance-coverage-031816

Marking the start of spring, motorcycle enthusiasts gathered this month at a rally in Daytona Beach, Florida, and will do so again in June in Johnstown, Pennsylvania. But do they have the right insurance coverage? Motorcycle insurance is a must for any avid biker, according to the Insurance Information Institute (I.I.I.).

“Auto insurers often offer motorcycle insurance coverage as either a stand-alone policy or an endorsement to a personal automobile policy,” said Michael Barry, vice president, Media Relations, at the I.I.I.

Like auto insurance, some coverages are required for motorcyclists; others are optional.

1. Required coverages: Most states require motorcyclists to carry a minimum amount of liability insurance, to cover bodily injury and property damage costs caused to other people involved in an accident. In addition, uninsured/underinsured (UI/UIM) motorist coverage is recommended, or even required, in many states as part of a motorcyclist’s policy to cover expenses for damage were caused by another driver who either does not have insurance, or whose insurance is inadequate.The mandatory minimum limits for these coverages in states where they are required for motorcyclists are generally similar to those required for automobiles.

2. Optional coverages:
   a) Collision—covers damage resulting from a collision with another vehicle, an object or as a result of flipping over.b) Comprehensive—covers damage caused by events such as fire, flood, falling objects, theft or vandalism.

   c) First-party medical coverage—covers your own medical expenses if they were incurred in an accident while operating your motorcycle.

   c) Emergency road service—covers towing and roadside assistance costs.

   d) Accessories and customization—covers the repair or replacement of accessories, like helmets and safety jackets, and customized equipment added to the motorcycle after purchase, such as exhaust pipes, saddle bags, and seats.

Beyond the types and amount of coverage purchased, several factors will also affect how much you pay for motorcycle insurance, including:

• Your age and driving record
• Where you live
• The model, make and horsepower of your motorcycle
• Where you store and drive your motorcycle