Life Insurers Withheld Death Benefits

By 2016, state regulators had found that some of America's largest life insurers knew policyholders had died but failed to pay benefits when families did not file claims. In many whole-life cases, insurers continued taking premiums from deceased customers' accumulated cash until it ran out and the policies lapsed, even as they used the Social Security Death Master File to stop annuity payments. At that point, 25 insurers had agreed to pay more than $7.5 billion, while about 35 remained under investigation. By August 2018, 27 insurers representing over 80 percent of the market had accepted reforms, and the investigation had returned approximately $9.7 billion to beneficiaries nationwide.

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