One of the problems with the life insurance industry, at least according to some, is that policy payouts are more reactive than they are proactive. Life insurance companies aren’t scouring the local obituaries to find out if one of their policy holders has died, and then immediately phoning the beneficiaries. In fact, that kind of practice is, to say the least, impractical. Still, there are things that could be done to help people find life insurance policies and make their claims easier.
The state of Ohio is looking at legislation that would do just that. This particular bill would allow the state to create a database that includes information about life insurance policies held by people within the state. The database would then be accessible to beneficiaries and help them in claiming unclaimed proceeds.
The database would have some safeguards on privacy. The proposal includes a provision that the information that is contained in the database would only be made available when a policy holder dies. Furthermore, the information would only be made available to people that are specifically listed in the policy holder’s will.
Companies that sell life insurance, whether it’s term life insurance or whole life policies, would be required to register their policies in the state’s database within 30 days of issuing the policy. The Ohio Superintendent of Insurance would have powers to, according to the legislation, “adopt rules as necessary to establish and implement the statewide life insurance database.”
This proposal comes during a time when the Ohio Department of Insurance already has a voluntary program that accomplishes much the same kind of thing. There are many life insurance companies, including some of the largest in the state, that are already participating in the program. The program comes at no cost to the insurance companies.
Currently, the program lets a deceased person’s family submit a search request to the Department of Insurance. They then forward the request on to all of the companies who are allowed to sell life Insurance in the State of Ohio.
It is estimated that implementing such a database could result in millions of dollars of unclaimed insurance policies in Ohio being able to be claimed.
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