Unclaimed Policies and Mutual Life Insurance Demutualization Payments:
► Life insurance policies worth $2.4 billion go unclaimed every year, because family members fail to notify the insurance company when a policyholder dies, and little effort is made to find lost heirs and beneficiaries.
In addition to unclaimed policy benefits, heirs and beneficiaries may be entitled to Demutualization Payments and Settlement Compensation arising from a recently concluded multi-state audit of the nation's largest insurers.
Demutualization is the process of converting a mutual life insurance company, owned by its policyholders, to a publicly traded stock company owned by shareholders, pursuant to a plan of conversion approved by government regulators.
Many of the nation's oldest and largest life insurers - including Prudential, John Hancock and MetLife - began as mutual insurance companies, owned by their policyholders. In recent years most have now converted to ownership by stockholders, via a process known as demutualization.
Mutual life policyholders (and heirs) continue to be entitled to receive whatever policy benefits may be due, but in addition receive stock, cash and/or policy credits in exchange for their ownership interest in the old mutual insurance company.
The amount paid to each policyholder is based on a number of factors, including length of time the policy has been in force, face value of the policy, and total premiums paid.
► For many policyholders, the windfall arising from demutualization can be substantial, and the financial benefits continue to accrue after a company demutualizes.
As shareholders, demutualized life policyholders are now entitled to share in the company's profits via stock dividends, and benefit from its growth in the form of an appreciated share price. Shares may be sold at any time, without affecting policy benefits.
► Millions of missing policyholders and heirs aren't aware they are entitled to receive demutualization compensation. A recent government audit found 21 major life insurance companies failed to pay death benefits to beneficiaries even in cases where they knew the policy holder was deceased.
When John Hancock demutualized, it did not have current addressed for 400,000 policyholders. Prudential could not find 1.2 million policyholders entitled to receive compensation, and MetLife estimates 60 million shares of stock arising from its demutualization - worth billions of dollars - went unclaimed.
Contact efforts were unsuccessful, due to name changes after marriage or divorce, unreported changes of address, expired postal forwarding orders and non-current beneficiary information.
► By law, unclaimed demutualization compensation is remitted to the custody of a government trust account until claimants come forward.
Government custodians recently collected $22.8 billion in a single year, of which less than $1 billion was reclaimed. Current and former policyholders and their heirs - the majority of whom are unaware they're entitled to unclaimed stock and/or cash - should initiate a database search. Click on the search icon or select a company from the list below.
|American Mutual Life / Amerus||Manufacturers Life / Manulife||Principal Mutual Life|
|Anthem Insurance||Metropolitan Life / MetLife||Provident Mutual Life|
|Central Life Assurance||Mutual of New York / MONY||Prudential Life|
|Equitable / Axa||Mutual Service Life||Standard Insurance|
|General American Life||Nationwide / Allied Mutual||State Mutual / Allmerica|
|Indianapolis Life||Northwestern / ReliaStar||Sun Life / Clarica|
|John Hancock Mutual Life||Phoenix Home Life||Unum Mutual / Unum|