It may seem odd that people can actually forget about their money. But the fact remains there are millions sitting in unclaimed and forgotten policies. There are many reasons why this happens, but there are also valuable resources available for you to check your own situation, or track the policies of people who have died and not kept a record of policies they hold or who their beneficiaries are.
Precautions you should take
The two biggest reasons money goes unclaimed is that policyholders just forget about their nest-egg. They tend to disappear and insurance companies struggle to find the owners. Often a policy holder dies, and because he or she has lost touch with family members, the beneficiaries remain unaware they have a windfall waiting for them. Another factor is that some policyholders emigrate and forget to cancel policies or inform the insurance companies they have left the country.
As a policyholder you have certain responsibilities:
- You need to update and maintain your personal details and all your latest contact details with your life insurance provider regularly – at least every two years. You are responsible for this.
- When you do this, you need to confirm your beneficiaries and their contact details. If you would like changes at these checkpoints, ensure they are properly captured and effected.
- If you find you had policies with companies that may have become defunct, remember you can check your investment with ASISA (Association for Savings and Investment SA).
- If you have lost policy documents, make contact with the initiating company as soon as possible.
- You should keep a list of all your life assurance policies and investments together with your will. And you should ensure this information is lodged with an executor, lawyer or financial advisor.
Companies will take steps to find you, should your policy fall due and they need to contact you. Remember to familiarise yourself with company procedures:
- Administrative, management and tracing fees may be charged on any unclaimed assets, reducing benefits payable.
- Unclaimed assets may be re-invested.
- You will need to consent to the life assurer sharing your personal information with a tracing company.
- Regular communication will be sent to you as a policyholder, so you need to keep your insurance provider alerted to any change of address. If you do not do this, and are therefore not up to date with policy/industry changes, then it will be your fault.
Checking the deceased estate
Are you a beneficiary?
It could be that someone in your family has regularly paid a premium into a life insurance in which you are named as a beneficiary, but you have never been informed of this policy and the deceased has failed to keep a record. When the time comes to inform you of your money due, the company may not be able to track you down, or if it does so, you may fail to come forward to collect your monies
If you need to find out if any such policy has been held in your favour, you need to check through the deceased papers, files, deposit boxes, income tax returns, etc, and contact any insurance companies, financial professionals or employers mentioned in the documents, and provide them with the necessary documents such as the policy contract, your ID and bank details, together with the death certificate if the policyholder is deceased. You can also search for lost policies on the ASISA’s website, or get a free report from Verifi.
Companies and unclaimed benefits
Rules and regulations
According to the law, a debt need not be paid if claimed after three years. However, the law is different for policies and prescription will never apply to policy claims, even if the claim is 100 years old – provided it is provable and legitimate.
- A life insurer may never take ownership of unclaimed assets. However, monies that remain unclaimed by the time the original policyholder would have reached the age of 100, may be invested in social responsibility initiatives that offer a return on capital.
- Life insurance companies must hold and grow unclaimed policy benefits until the rightful owner is found, no matter how long it takes (or at least until the policyholder would have reached 100 years of age).
- ASISA members are now required to intensify efforts to trace policyholders or beneficiaries in order to minimise the pool of assets that remain unclaimed.
- If the rightful owner of the assets cannot be traced, the life company must repeat the tracing process within a three-year period, and again within 10 years if the assets remain unclaimed.
- If, after 10 years, the life assurance company cannot trace the beneficiaries or policyholder, an external tracing company must be used. The only time this requirement may be waived is if the cost of tracing exceeds the amount payable.
Check your policies, check your life
Verifi is an online tool that provides you with an immediate and up-to-date overview of all your life insurance and investment policies by sourcing information from all the major life insurance companies – and presenting the information in a comprehensive report.
With Verifi you are able, for no charge, to access information on all your life and investment policies at a glance. You are able to check the types of policies you have, the names of the insurance companies providing the cover, the nature and extent of the insurance cover provided – and other vitally important information such as the details on your policies being correct.
To find out more, please visit: www.verifi.co.za