Illinois, with the backing of the state treasurer, is looking to enact a law which will help ensure that insurance companies pay out benefits of life insurance policies which until now have not been distributed.
The new legislation will compel companies to look at the last 20 years of payment history to check that all money owed to beneficiaries was paid out properly and in full. State Treasurer Michael Frerichs will help people who might not even know that they are entitled to payments from life insurance policies.
“We think there are tens if not hundreds of millions of dollars more that should be paid out to the loved ones, the heirs or beneficiaries, of Illinois life insurance holders,” Frerichs said.
The Office of the Treasurer has already been working with about 20 of the biggest insurance companies that sell these types of life insurance policies in Illinois. Frerich said that they have already found about half a billion dollars’ worth of unpaid benefits.
Legislation is needed because not all companies cooperated with his office to find unpaid funds. Some companies simply did not respond, while others declared that they would not participate.
Andrew Rand, Board Chairman of Peoria County, said such a law makes perfect sense.
“It seems so self-evident that the one event that the policy protects and covers, the death, would be the one responsibility the insurer would have,” he said. “Death is a certainty, and that’s why the life insurance policy was created.”