If a bank has lost touch with a customer and the account has been dormant for more than 10 years the money is paid over to the Bank of Canada. It is an easy search to see if you have any money to your credit. Bank of Canada. There is more than $600 million waiting to be claimed.
Bankruptcy trustees too must transfer amounts for those who cannot be found to the Superintendent of Bankruptcies. There is another $20 million or so there. The largest is near $180,000
All good and it reduces the complexity of operating accounts for banks and bankruptcy trustees. But there are more that go nowhere.
What happens to unused gift cards or credit notes? How about uncashed checks or travellers checks. Uncashed money orders and bank drafts end up with the Bank of Canada. I think gift cards could be a sizable number, but who really knows.
The other potentially large amount is unclaimed benefits from a life insurance company.
Some estimates put the number of unclaimed policies as high as one on four, but in my experience that number is unlikely. It is not zero, though.
Most of us would expect it to be impossible to miss a claim, but reality says it is not. Suppose your parents bought a 20-pay whole life policy on you when you were born. They forgot about it and you never knew about it. You pass away at 80. What are the chances your heirs will know enough to claim? Zero. Since the policy will not lapse, the insurer will eventually, maybe around your age 115, need to decide what to do with it.
In the US, some of the companies have agreed to turn money over to the states. That will not likely do much to get it into the hands of the beneficiaries, but the states will win and the insurers will give up the money. Maybe that is a little good.
What can you do if you think there may be a policy outstanding and the person is deceased? If you know the company, it is not very hard. Except for the ones that have disappeared by merger. Again, there are ways to find who has it now and most of the companies are helpful.
If the policy has been paid up for a while, it will be difficult. Nothing will trigger your quest.
Your best defense for the living policy owner is to be proactive. Don’t lose touch with your agent. If the agent has left the business, ask the company to assign a new one. That has more potential benefits to having an agent than avoiding unclaimed death amounts, so make sure the new one is one you can work with.
Eventually the world may be so interconnected that insurers can tell when they have a claim and who to pay it to. We aren’t there yet, so keep connected.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. firstname.lastname@example.org 866-285-7772