Wednesday, April 28, 2004

Questions and answers from Oxendine Q: My uncle passed away recently.ÊWe think he had a life insurance policy, but we haven’t found it. If it turns up later, will the company still pay the benefits? A: If you find the policy within six months to a year, you should have no trouble claiming the benefits. To begin your search, go through the deceased’s cancelled checks to see if any were made out to an insurance company.ÊTalk to his lawyer, banker or accountant to find out if they know about an insurance policy.ÊAlso, contact his employer. Even if he had been retired for years, an employee policy may still be in effect. If the insured had a term life policy, you’ll receive benefits if he died before the policy expiration date. A term life policy offers coverage for a specific period, then expires. It does not generally accrue a cash value.ÊOther types of life insurance, such as whole life, remain in force for as long as the premiums are paid, and may begin to build a cash value after being in force for a few years. If the deceased kept up the payments on a whole life policy until he died, the policy would?ve been in force at the time of death. If you discover such a policy after the date of death — even long afterward — you would receive benefits, plus interest from the date of death. If payments were discontinued and the policy lapsed, you will probably get nothing. However, some insurers will switch a whole life policy to a form of term, and use the cash value to pay for the extended term policy for a short period. Other companies may opt to convert the whole life policy to “reduced paid up” status, which means the insurance remains in force, though the value of the death benefit may be substantially reduced. Please send your insurance questions to Insurance Commissioner John Oxendine, 716 West Tower, 2 Martin Luther King Jr. Drive, Atlanta, GAÊ30334, or call 404-656-2070 (toll free at 1-800-656-2298), from 8 a.m. to 7 p.m. weekdays, for assistance with an insurance question.ÊTDD services available at 404-656-4031. Web address is www.gainsurance.org.