The Social Security Death Master File is an ominous name for a benign computer database maintained by the Social Security Administration (SSA). The Death Master File is simply a list of the names of people whose deaths have been reported to the SSA. What is less benign, however, is what insurance companies like MetLife and Prudential have been doing with the Death Master File.
These insurers regularly check the list to look for names of beneficiaries and when they find them, they stop paying for the annuities that were funding the life insurance benefits being paid. What these companies do not do is check the list for names of policyholders in order to notify beneficiaries that they may make a claim. The problem is that very often, unless the policyholder has informed a beneficiary that he has been listed as a beneficiary in the policyholder’s life insurance policy, that beneficiary would have no way of knowing that he was named, or that he could make a claim upon the policyholder’s death. In other words, insurance companies are acting with only their bottom line – and not their policyholders’ best interests – in mind.
While there have been lawsuits filed against MetLife and Prudential for this conduct, and a settlement has been reached, there really is no protection for consumers to prevent this practice from happening in the future.
In order to best protect yourself and your beneficiary(ies) with regard to the life insurance benefits for which you or your employer have been paying premiums is to ensure that you do the following:
(1) Inform your beneficiary(ies) that you have named him/her(them) in your life insurance policy as the beneficiary(ies).
(2) Keep a copy of your life insurance policy and the instructions for making a claim in a safe place.
(3) Tell your beneficiary(ies) where your policy is kept and make sure they will have unrestricted access to it.
Believe it or not, insurance companies often find reasons to deny life insurance claims! If you or anyone you know is ever in that position, we can help.