LOS ANGELES (CBSLA.com) — Thousands of Californians are owed millions of dollars in life insurance benefits and may not even know it. Now, the state Controller’s Office is trying to hand $307 million to its proper owners.
State officials said beneficiaries did not know they were named in the policies, and insurance companies made no effort to notify them.
After dozens of audits and lawsuits, the Controller’s Office found more than two dozen insurance companies were not notifying beneficiaries that they were the recipients of death benefits.
California and 40 other states reached a settlement with 25 insurance companies to pay out about $2.4 billion to families across the country, including $307 million to people in the Golden State, according to the controller.
The office said the amount of unclaimed money in the Los Angeles area ranges from several thousand to hundreds of thousands of dollars.
Harvey Rosenfield from Consumer Watchdog accused the companies of pocketing the money. “The insurance companies would dip into the life insurance proceeds of people who had died and pay premiums on behalf of dead people until there was no money left.”
The American Council of Life Insurers released a statement: “In a small percentage of cases, life insurance benefits go unclaimed. … Life insurers want everyone to receive the benefits to which they are entitled rather than paying unpaid benefits to state governments.”
Rosenfield advised policy holders to tell their beneficiaries that they are named in the policies.
“No skin off their teeth to just go ahead and hold on to this money that belongs to the rest of us, then they’ll keep doing it,” he said.
Go to the State Controller’s website to see if you are owed any money.
Read more about the case here: http://www.consumerwatchdog.org/case/transamerica-life-illegally-hikes-cost-insurance-charges