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Life Insurance, on paper, seems like a relatively simple concept: you purchase a policy and when you pass away, a death benefit is paid out to your named beneficiaries. The coverage period for a policy, however, can last for a lifetime and as the years go by some policyholders lose track of their policies, which can result in unclaimed benefits after their death.
According to an article Do You Have Unclaimed Life Insurance Benefits? published on Hippo.co.za, there is currently R45 billion in unpaid Life Insurance benefits waiting to be picked up by their rightful recipients. Here’s how you can prevent your policy from becoming a lost legacy.
Notify your beneficiaries
Most unclaimed policies are a result of miscommunication between the policyholder and their beneficiaries. This usually happens when someone takes out Life Insurance and either forgets to tell their inheritors or intentionally keeps the information from them. The beneficiary may also be aware that they are listed on the policy but at a later stage becomes physically or emotionally distanced from the policyholder.
When taking out a policy, the best thing to do is to let your loved ones know as soon as possible or resume contact with an estranged beneficiary to remind them of the policy. When notifying your beneficiaries, be sure to disclose the policy details with them as well as the contact information of the insurance provider.
Keep your documents in a safe place where they can be easily accessed
As people age, they sometimes forget about that old policy, or where they stored proof of the insurance, and even the certificate needed to file a claim. This can cause difficulty for your family members when trying to locate the necessary documents.
When documents are not submitted, the process of claiming may be delayed and beneficiaries simply give up trying to free the funds. It is therefore essential to keep proof of the policy where your family will be able to easily access them. For safekeeping, it’s best to create a digital copy of the policy in case the original is misplaced or damaged.
Stay up to date with all relevant information
If you move to a new address or acquire a new contact number, bring your insurance provider up to speed with these changes. When your new contact information does not match what your insurance provider has on record for you, your insurer may eventually lose contact with you. Similarly, it’s crucial to provide and update the detailed personal information of your beneficiaries you have listed when necessary.
In the event of your death, the insurance provider may not be able to track your beneficiaries to inform them of the policy. Be sure to also check that the contact details of your insurer have not changed. If the company changes its name or merges with another brand, it can be difficult for your beneficiaries to contact them when it’s time to claim.
Keep these three tips in mind when you take up a Life Insurance policy or if you already have one and ensure that your loved ones have access to those much-needed funds when they need it the most.