A New York and New Jersey Lawyer Who Represents Policyholders and Beneficiaries in Life Insurance Denial Cases

The California Controller has been investigating John Hancock, along with 21 other life insurance companies, with respect to the practice of withholding life insurance death benefits from beneficiaries by not investigating if policyholders had become deceased.

The Controller has reached its first settlement in the investigation with John Hancock, which has denied the charges.

At issue is the failure of life insurance companies to take a proactive approach to determine if policyholders have passed away. A California law requires that when there is no customer contact for 3 years, the customer’s property must be delivered to the state, which can then route unclaimed property to its owners.

For instance, if a life insurance policyholder dies and her remaining family members are unaware of the existence of the policy, the proceeds should eventually be delivered by the insurer to the state, which can then distribute them.

According to the controller, life insurance companies rarely contact the controller as they are supposed to. In fact, the controller alleged that John Hancock has a practice of avoiding paying death benefits, instead collecting premiums from the accrued cash value of a policy, even when the premium payments stop coming from the insured. As a result, the insurers deplete the cash value of the policy and do not have to pay a death benefit.

Now, John Hancock is going to begin searching public databases to find out of its customers have died, rather than simply relying on beneficiaries to submit death claims.

Florida authorities are also going to start examining this practice by life insurance companies.

You can read an article at the Wall Street Journal that reported on this issue.

2 Responses to “John Hancock in Settlement for Allegedly Not Investigating Death Claims”

  1. [...] little while back, I posted about how California is investigating John Hancock for turning a blind eye to when life insurance [...]

  2. Frank says:

    Insurance companies don’t call out to make sure you haven’t wrecked your care why should they check to see if you’re still alive. It should be the responsibility of the insured and the beneficiary to alert insurance companies of the death of the insured. There have never been any regulations or laws built around that and to paint this against the insurance companies instead of the greedy states is to misinform. As a regular practice all insurance carriers need to add an extra step to thier proceedures and that is to alert the beneficiaries that they need to check the state’s unclaimed property for any unrelated funds that might be there. The states know that only around 14% of the unclaimed property monies will ever leave their “Kitty”. Around 86% gets absorbed into their budget, in states where they’re facing bankruptcy this would seem easy money and it can be painted in a way that makes them look like heros. The best way for the insurace carriers to balance the scales is to let ALL the beneficiaries that they speak to to make sure to check unclaimed property on the web.

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