RI treasurer’s office: Thousands owed life insurance benefits

PROVIDENCE, R.I. (WPRI) — Harriet Landesberg recently discovered she was the beneficiary of an old life insurance policy that was never paid out.

The 104-year-old had no idea she was owed about $5,000 in benefits.

“I found out through my granddaughter,” explained Landesberg. “She saw it online. It is a shame that you have to do the work to try to find something.”

Mel Landesberg, Harriet’s son, helped his mother claim the money.

“It’s not enough to change her style of life, but it does help maintain her style of life,” he said.

The Target 12 Investigators have learned Harriet is one of thousands of Rhode Islanders who are owed life insurance benefits. Rhode Island General Treasurer Seth Magaziner said life insurance companies are purposely hanging on to the money.

“It’s an industry-wide problem because the incentives are such that they make more money the more they drag their feet,” said Magaziner.

Several states, including Rhode Island, went after about two dozen of the country’s largest life insurance companies and audits revealed billions of dollars that should have been paid to beneficiaries over the years.

“This is wrong,” said Magaziner. “When people buy these insurance policies it is with an expectation that their beneficiary will be paid in a timely way. It’s really egregious and outrageous that some companies felt that they didn’t have to honor those promises.”

Because of a new Rhode Island law, when benefits are unclaimed they’re turned over to the state. So far, Rhode Island has helped 2,000 people claim more than $6 million in life insurance money, but there’s still $20 million that’s considered unclaimed property.

“It’s a lot of money and a lot of people,” said Magaziner. “Because the insurance companies weren’t doing the right thing and being proactive about finding these individuals and reuniting them with these funds, we had to step in and take action.”

In a statement, a spokesperson for the American Council of Life Insurers said:

“In a very small percentage of cases, life insurance benefits go unclaimed because family members are unaware that they are listed as beneficiaries in existing policies.

Life insurers want everyone to receive the benefits to which they are entitled rather than paying unpaid benefits to state governments.”

More Audits?

Treasurer Magaziner said he suspects smaller life insurance companies are also delaying life insurance payouts.

“We are looking at the possibility of forcing audits of some of these smaller life insurance companies,” said Magaziner. “Whether your policy is at a big company or a small company, you need to have the peace of mind knowing that when you pass away, the person for whom you bought that policy will get the funds that they’re entitled to.”

Magaziner sad he expects challenges from the life insurance industry.

“The insurance industry is trying to water down these consumer protection laws not only in Rhode Island but around the country,” said Magaziner. “If the industry attempts to water down our ability to reunite Rhode Islanders with the life insurance proceeds that they’re entitled to, we will fight them.”

For Harriet Landesberg, the check arrived a few weeks ago.

“Regardless of how much it is, it helps,” said Landesberg. “Especially if it belonged to you.”

Are You Owed Life Insurance Money?

It’s easy to search for unclaimed funds. Just go to missingmoney.com.

You can also find more information through the RI General Treasurer’s website.

See the full statement from American Council of Life Insurers below:

“The life insurance industry has a long history of honoring its obligations to policy owners and their beneficiaries. In the past ten years, life insurers nationwide have paid more than $600 billion to beneficiaries of life insurance policies. In Rhode Island alone, life insurers paid $3.2 billion to beneficiaries during the same time period.

In a very small percentage of cases, life insurance benefits go unclaimed because family members are unaware that they are listed as beneficiaries in existing policies. Life insurers turn over unclaimed benefits to the state no more than three years after they are due in accordance with Rhode Island law.

Life insurers want everyone to receive the benefits to which they are entitled rather than paying unpaid benefits to state governments. That is why the American Council of Life Insurers has advocated since 2012 for state legislatures to adopt a national standard on the issue. Thanks to the leadership of House Corporations Committee Chairman Brian Kennedy and with the support of the Rhode Island Insurance Division, Rhode Island enacted legislation in 2014 based on this standard that requires all life insurers to use new technologies to identify policyholders who have died but whose beneficiaries have yet to make a claim.

Nineteen other states have enacted similar laws. ACLI is urging all states to adopt this standard no later than the end of 2017.”

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