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Bear_Nenno
11-28-2014, 03:37 PM
If someone took out a Life Insurance policy in 1958 and dies in the mid 1980s, what happens to that money if it is not claimed until 2015? Does it accrue interest? Is it likely that such a policy would only be worth a couple hundred dollars? Were policies that small in 1958? A relative was recently contacted by an insurance company to close out an old policy. They have been looking for a next of kin for years because apparently nobody knew about this policy. When my relative asked the agency how much the policy was for, she was told something like, "I think it's for about 300." So she's been working off the assumption that it is only $300. I thought this sounds pretty low, though. So I asked if he said "300 dollars" "300 bucks" or simple "300". She says he just said "300".
Is it more likely that this policy is for three hundred thousand? Or does 300 sound about right? Or could it just as easily been either. If it matters, this person was not super rich or anything. I believe he was middle class or lower-middle class.

Another thing I considered is that maybe the policy was supposed to be more, but he stopped paying on it at some point, so $300 is just the balance of what he paid into it minus penalties or something. I don't know how it works. Is that possible, or would that money usually just be forfeited if the policy was cancelled or payments stopped being made or something?

DataX
11-28-2014, 04:06 PM
No it's likely it is a scam (I think). Most (all?) states have a process where if an account isn't claimed for like five years - they get sent to that States Abandoned Property department. The insurance company, bank, whatever then washes their hand of the matter.

Various companies will basically try and find these people and charge a fee for information. You can find the info yourself on the sates website.

"Scam" might be harsh - as in some cases they probably aren't breaking the law.

Cunctator
11-28-2014, 04:12 PM
A $300,000 sum insured in 1958 would have been a tremendously large amount of cover. It seems very unlikely.

Bear_Nenno
11-28-2014, 04:17 PM
Scam was my original thought. And it will be in the back of my mind when I go through all the paperwork they sent her in the mail. I haven't read any of it yet. After asking a couple questions like "How much did they say they were going to charge you?" and stuff like that, my immediate scam concerns were put aside. If it is a scam, they are not very efficient. They got a hold of a lady who has zero assets or even a positive bank account balance and asked her if she knew J.D. Doe (the exact name of relative, who died (exact date). Then went on to explain the insurance policy and stuff. They did not ask for any other information over the phone, just to confirm relationship. They sent everything else by regular mail. There is a lot of information among the papers such as company name, address, phone numbers, and that kind of information. My first step will be confirming all of it and calling these people.
But if it were a scam, I could only see it being an attempt to get personal identification, as I think that is what most of the application was, just asking for basic info. You're right though, it sounds strange.

Bear_Nenno
11-28-2014, 04:18 PM
A $300,000 sum insured in 1958 would have been a tremendously large amount of cover. It seems very unlikely.

Doesn't $300 sound excessively small, though?

Shagnasty
11-28-2014, 04:55 PM
Doesn't $300 sound excessively small, though?

I have helped a number of relatives clean up old accounts that I located on the web sites dedicated to finding such things. All of them have been in the <$1000 range and some were <$100 even after sitting idle for decades but the money was real and just as good as any other. It is odd that the money wasn't just turned over to the state at some point though. I thought that all states had a system set up to handle inactive orphaned accounts.

What if we are all wrong though? What if the money was aggressively invested the whole time and hit a lot of high fliers along the way. You are all going to get a good laugh when she goes to claim it and they say, 'I told it you it is 300. We have never had to cut a check for that many millions before!'

Bear_Nenno
11-28-2014, 05:42 PM
I have helped a number of relatives clean up old accounts that I located on the web sites dedicated to finding such things. All of them have been in the <$1000 range and some were <$100 even after sitting idle for decades but the money was real and just as good as any other. It is odd that the money wasn't just turned over to the state at some point though. I thought that all states had a system set up to handle inactive orphaned accounts.

What if we are all wrong though? What if the money was aggressively invested the whole time and hit a lot of high fliers along the way. You are all going to get a good laugh when she goes to claim it and they say, 'I told it you it is 300. We have never had to cut a check for that many millions before!'

Ha! Though, if it were 300 million, that would surely explain why the company has been holding on to it instead of turning it over to the state.

sbunny8
11-29-2014, 10:05 AM
$300 in 1958 sounds like a reasonable amount of money for that time.

I used to sell life insurance, and I can tell you that the policies used to be like slot machines: rigged in favor of the house, with the illusion of prosperity. The policies tended to be small by today's standards and often ended up being worthless (literally). You could buy a policy in 1958 which appeared to guarantee you $1,000 no matter what happens but if you read the fine print you actually get a variable amount, minus any "cash value" that you've borrowed against. It wasn't until the 1970s and 80s that "term life" policies became more popular, so people started getting policies for $50,000 instead of $2,000. Then in the 1990s people realized they could actually afford $1,000,000 term policies and now we tend to think in terms of hundreds of thousands of dollars.

Back in the 1950s, people had the idea that the purpose of life insurance was to pay for your funeral, and maybe have something to borrow against if you had an unanticipated expense. A couple of hundred was enough. Nowadays, we tend to look at life insurance as a way to pay off your mortgage (and your credit cards) and have enough left over to send your kids to college without requiring your spouse to work 3 jobs in order to do it. You need six figures for that.

Antinor01
11-29-2014, 12:50 PM
I have helped a number of relatives clean up old accounts that I located on the web sites dedicated to finding such things. All of them have been in the <$1000 range and some were <$100 even after sitting idle for decades but the money was real and just as good as any other. It is odd that the money wasn't just turned over to the state at some point though. I thought that all states had a system set up to handle inactive orphaned accounts.

What if we are all wrong though? What if the money was aggressively invested the whole time and hit a lot of high fliers along the way. You are all going to get a good laugh when she goes to claim it and they say, 'I told it you it is 300. We have never had to cut a check for that many millions before!'

Depending on which sites you're looking at, those are searching the state databases of escheated accounts.

pkbites
11-29-2014, 05:38 PM
My mother has a whole life policy on herself that my grandfather bought and paid up in 1952. It is worth exactly $300 when she passes.

clairobscur
11-29-2014, 07:51 PM
No it's likely it is a scam (I think). Most (all?) states have a process where if an account isn't claimed for like five years - they get sent to that States Abandoned Property department. The insurance company, bank, whatever then washes their hand of the matter.

Various companies will basically try and find these people and charge a fee for information. You can find the info yourself on the sates website.

"Scam" might be harsh - as in some cases they probably aren't breaking the law.

Then it's not exactly a scam. Even if you could theoretically find the info yourself, they certainly provide a service by informing you about it, given that the alternative would be to never get the money because you didn't know it existed.

I guess you could then bypass them, but I wouldn't begrudge them their fee, if it happened to me.

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