[D Graber]

D Graber

.
“60 Minutes” tonight dropped this blockbuster:

In some cases, both life policies and annuities were canceled (looted). In others, retirement money was filched. There was clear evidence that some insurance companies were using the Social Security Death Master Index (online) to cross-check with their own records. If no beneficiary came forward, the insurer would cancel the policy and keep the proceeds instead of initiating a competent investigation to locate the beneficiary. There was a mention of this happening to some retirement accounts where the insurer would (post-death) then use the account funds to continue paying “premiums” until the account was exhausted — a system intended for use only for living policy holders who might lose their job and be unable to make a few payments.

The broadcast mentioned that dozens of insurers were guilty of this. Some have had to pay out huge settlement money. Others are fighting such penalties tooth and nail.

Here’s the broadcast link (both audio and transcription):

http://www.cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/

The implications for beneficiaries are ominous, including the cases where 401k funds are at stake.

http://www.cbsnews.com/news/60-minutes-overtime-are-you-owed-insurance-money-heres-how-to-check/

My unscientific impromptu gut feel opinion is that this makes including an advisory mention of such policies and accounts in estate wills or relevant trusts (to perhaps avoid probate) absolutely mandatory to protect the beneficiary(s).

–Dee

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