A new law in Florida seeks to make it more likely that life insurance companies will learn of policyholder's deaths and consequently make required payments to beneficiaries.
Life insurance is a key component of many estate plans. Because life insurance payments are supposed to be made immediately they can provide necessary funds to descendents and surviving spouses while the rest of the estate takes a slow course through probate.
Life insurance is also often used to provide longer term income for beneficiaries when the other estate assets are not enough to cover ongoing expenses. Florida has recently passed a new law that aims to ensure that these important planning benefits are carried through.
The Tampa Bay Times reports on this development in "New Florida law requires life insurers to do more to find beneficiaries."
What the law is trying to address is that sometimes insurance companies do not learn that their policyholders have passed away and do not make enough effort to learn if they have. This can happen when the policyholder has not provided enough information about the policy to other family members.
The law would require the insurance companies to check all policyholders with the Social Security Administration's Master Death File going back to 1992. Yearly checks would be required on an ongoing basis.
As many people retire in Florida it is a good place for this type of law. It should help in getting payments in the hands of beneficiaries sooner.
Reference: Tampa Bay Times (April 12, 2016) "New Florida law requires life insurers to do more to find beneficiaries."
