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Cashing in on life insurance policies

When it comes to life insurance, the process of filing a claim starts before the policy holder dies. / Mary Green

When it comes to life insurance, the process of filing a claim starts before the policy holder dies — after all, the beneficiary needs to know where the policy physically is.

“I would suggest keeping your policy with your will, any discharge papers from the military,” State Farm Agent Tim Thomas said. “I suggest people keep all those items together, along with a recent bank statement, a recent life insurance company, a recent benefits statement from your employers.”

Thomas said that if you hold the policy, you should try to get to know your insurance agent by meeting every couple years, mainly to make changes if you have any major updates to your life, such as a divorce.

However, he said these regular meetings could also make the claims process a lot easier for your beneficiary.

“If I see that in the paper or I hear that one of my customers has passed away that we have life insurance with, I’ll go ahead and initiate it,” he said.

When filing a claim, the National Association of Insurance Commissioners recommends that beneficiaries have access to a death certificate and certain pieces of information, including the policy holder’s full name and Social Security Number.

But if an agent doesn’t give the beneficiary a call after the policy holder dies, it’s up to the beneficiary to initiate that process by getting in touch with the agent.

That being said, sometimes beneficiaries can’t find the policy or don’t know if their loved one had life insurance. When that’s the case, Thomas recommended using the Life Insurance Policy Locator Service, provided by the National Association of Insurance Commissioners and the Georgia Office of the Insurance Commissioner. The service alerts participating companies to check for a policy in their system, and the companies can then notify the requesting beneficiary.

But those companies might not be the only ones scanning the records.

“Any time that obituary shows up online or in the paper, it opens you up to scam artists,” said Kelvin Collins, president of the Central Georgia Better Business Bureau.

Collins said many times, this takes the form of a suspicious and well-timed call.

“Some scam artists will step in and will say that the person was behind on their life insurance policy, and if this person will pay the money and catch it up, they will have this life insurance money from this policy,” he said. “What we have found is they don’t have a life insurance policy that’s lapsed. It’s just a scam artist that’s trying to steal their money.”

According to Collins, red flags including if the caller asks you to keep the call a secret from other relatives; if they request an unusual form of payment, like a gift card or wire transfer; or if the insurance company they say they represent can’t be found.

But sometimes, the caller the will say they’re with a company you do recognize, Collins said.

“Call that company later on the number that you find in the phone book rather than the number that they give you, and have them pull up your account,” he said. “If they can’t find an account, or they say they have no record of your deceased relative, then you know then that it’s just someone trying to steal your money.”

If you do get suspicious calls like these, you should report it to law enforcement, and you can also register it with the BBB’s scam tracker.

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