Could it be something about Michael Hartmann’s deodorant? That question came to mind recently as Hartmann described his efforts to get attention for his life insurance policy locator database service, FindYourPolicy.com.
Life policyholders can use the site to list the companies that issued their policies along with the last four digits of their Social Security numbers.
When a policyholder dies, a potential beneficiary can enter the policyholder’s name, the policyholder’s birthdate and the last four digits of the policyholder’s Social Security number. The searcher then sees the life insurance company names the policyholder listed.
Policyholders who want an extra layer of security can require searchers to provide a four-digit access code.
For the policyholders, the service is free. For the searchers, registration costs $9.95.
Given all the recent concern about the dead souls on life company policyholder lists, and state regulators’ push to locate unclaimed property, Hartmann had thought life insurers, agencies or regulators might have shown some interest in the locator database.
So far, no.
One executive told him, “I don’t find that you’re necessary or that you’re a benefit to our customers.”
Hartmann said he knows from personal experience that an issuer name database could come in handy for people dealing with the death of a loved one. He and his brother Edmund came up with the idea for the service four years ago, after their father died and they discovered their mother had not filed a life insurance claim.
She thought the life insurance company would contact her.
“It doesn’t work that way,” Hartmann said.
Hartmann—a life insurance agent himself—investigated further and found that, all too often, “people don’t know the company name.”
In still other cases, Hartmann said, spouses, children, nieces, nephews and other beneficiaries have no idea that they are policy beneficiaries.
Nationwide Financial Services Inc., Columbus, Ohio, recently conducted a survey of 805 U.S. life policy owners and found that 9% do not think the policy beneficiaries know they are beneficiaries.
Hartmann has found that people who work in life insurance are not all that much more likely to be keeping good track of this sort of thing than those outside the industry.
At parties with colleagues, he asks, “Do you know your parents’ policies’ writers?”
Even the I-dotters and T-crossers who know the names of their parents’ main life insurers are unlikely to know the names of the issuers of smaller life policies the parents may have accumulated over the years, such as paid-up baby policies from days gone by, or the credit life policies that come along with credit cards.
To fill the holes in knowledge, “there has to be a central database,” Hartmann said.
MIB Group Inc., Braintree, Mass.—an organization that runs a medical information database service for life insurers—offers a locator service for the customers of the member insurers, but the database goes back only seven years, and it has records only when a company searched MIB records before writing a policy.
Professional policy locators can help, but there is no guarantee that life insurers will respond to a locator service’s queries, Hartmann said.
For a consumer, simply contacting a life insurer to learn whether the consumer is a beneficiary of a policy written by a life insurer is more difficult than most consumers expect, Hartmann added
Because of privacy concerns, a life insurer may require an individual to submit a copy of the death certificate and other paperwork before the insurer will verify that the individual appears to be a policy beneficiary.
The process may be simple if two companies are involved, annoying if 10 are involved, and daunting if no one has any idea who wrote a dead person’s coverage and hundreds of insurers must be contacted.
Simply knowing the issuer name makes the claim process much faster and much easier, Hartmann said.
So why haven’t insurers started encouraging policyholders to use Hartmann’s service, or started a competing service?
One possibility that Hartmann has considered is that insurers would just as soon not have to pay more claims more quickly. Another possibility is reluctance to be the first big, high-profile company to try something new. A third possibility is privacy worries.
Hartmann said he thinks the design of the FindYourPolicy.com site, which requires users to enter only their names, their birthdates and the last four digits of their Social Security numbers, should minimize privacy concerns.
The information a hacker could get out of the database would probably not be enough to start the claim process at a life insurer, let alone get a death benefit, Hartmann said.
But Hartmann has given up for now on trying to attract the interest of insurers or big life agencies. He plans to use venture capital money to mount a publicity campaign and appeal directly to consumers.
In 2012, Hartmann will be courting consumers through radio shows, television appearances and raffles.
Hartmann is hoping an insurance company will respond to strong consumer demand for the service and start recommending it to its own customers.
If a life insurer participated, that would show consumers that the company really cares about clients, Hartmann said.
Participation also could help a life insurer make a case that it had done its level best the next time the unclaimed property auditors swing by.