Hoffman-Backed Proposal to Protect Life Insurance Beneficiaries Passes House

SPRINGFIELD, Ill. – Legislation sponsored by state Rep. Jay Hoffman, D-Swansea, that would help ensure that family members receive their loved ones’ life insurance benefits recently passed the House.

“Life insurance companies should not be allowed to get out of payments because something falls through the cracks,” Hoffman said. “People pay diligently into life-insurance policies to make sure that their loved ones receive assistance. This proposal helps guarantee that policies are paid out and that families receive what their loved ones wanted them to have.”

Hoffman’s House Bill 302 requires life insurance companies to compare the Social Security numbers of their policyholders dating back to 1996 to Social Security death records. The measure builds off a new law signed last year requiring insurance companies to inspect Social Security death records for newly signed policies going forward.

Hoffman’s legislation requires companies to also look back through their records and ensure the beneficiaries of these policies receive any funds owed to them. The Illinois treasurer’s office has identified $550 million in unpaid death benefits in Illinois since 2011. Hoffman’s measure would also require insurance companies to request updated contact information from policyholders to keep policies from going unpaid.

“There are vast sums of unpaid death benefits that belong in the pockets of Illinois families, rather than padding the bottom line of corporate insurance companies,” Hoffman said. “The work of ensuring that benefits are paid out should be on insurance companies, not grieving families.”

House Bill 302 passed the House and is awaiting further consideration in the Senate.