More Than Just Your Will – Part 4

or every grain of sand on the beach and every star in the sky, there is a different theory on life after death. No one really knows what happens. And it is that inability to find some tangible proof of the afterlife (if there is one) that is often replaced by a profound desire to control what happens here, in the familiarity of earth, family and friends after we are gone. In reality, all we can do is accept the inevitable and prepare accordingly.

Let’s ruminate on the ones standing at the sidelines of the dying, the ones watching and waiting for the big event. Whether you are present or not, realizing life has ceased in someone you knew and/or loved is perspective altering to say the least. Aside from the actual grieving, there are responsibilities that need attending to. There are final bills to pay, belongings to distribute according to the last wishes of the deceased, and family to comfort. When there have been few or no arrangements made, the family is left to figure things out themselves. Essentially, it’s a guessing game. What are the debts? What are the assets? How would the deceased have wanted assets distributed? Is there life insurance? This last question is quite significant. Read on.

Life Insurancer
Aside from the will and banking information, life insurance documents are among the most important items to keep filed in the Death Dossier. Without any knowledge of insurance policies, the family cannot make a claim. According to National Association of Unclaimed Property Administrators, as of 2010 American state treasuries and other governmental agencies have about $32.8 billion in unclaimed assets. Those unclaimed assets are primarily made up of safe deposit boxes, stocks, bonds, escrow accounts and of course life insurance benefits.

Several ‘money finder’ websites, such as Unclaimed Assets, report that more than one quarter of all life insurance policies go untouched. The insurance benefits end up being signed over to the state government, usually because the family of the deceased is either unaware of the policy or doesn’t know they need to notify the insurance company of the death. In addition, an audit carried out by the US Department of Labor in 2010 found that insurance companies make almost zero effort to locate the family of a policy holder, even if they know they have passed away. The result is over one billion dollars’ worth of unclaimed benefits are left sitting with the insurance underwriters.

So, we have millions and millions of dollars sitting in a perfect position for harvesting. In May of 2011, USA Today reported several states “are aggressively enforcing their unclaimed property laws to force insurers to hand over the money” left unclaimed. One Califo
ia insurer has already reached a settlement with the state controller, by which the state has the use of the money interest-free.

According to non-profit consumer advocacy group Center for Insurance Research, the most prevalent reason for unclaimed life insurance benefits is logistics. Since the insurance company is doing little more than making a phone call or sending a letter to the beneficiaries, it’s very easy for insurers to lose track of the families of policy holders. On the other end of the paper chain, the family doesn’t always know there is a policy in existence. There are new rules for insurance companies coming into effect on 2012, but in reality it is up to the policy holder and the beneficiaries to share information like this.

Best Scenario: Include copies of all life insurance policies; employee funded life insurance, pensions and other means of post-life pay outs in your Death Dossier.

Conclusionr
Throughout this series we have highlighted the importance of the Death Dossier, for every adult at any age. Compiling all your financial documents, last will and testament, insurance policies, proofs of ownership, marriage certificates, divorce judgments, and so on should now be a high priority. Yet the most important task is still awaiting completion. Tell your family, trustee, and/or power of atto
ey about the Death Dossier and the exact place to find it. When all the right people have been made aware of the dossier, it’s time to put it all behind you and get on with living!