What happens to policy when an employer goes out of business?

[weenumsmom]

My FIL passed away in January and we've been working through settling his estate. We ran across a life insurance policy he had purchased through his employer in the early 2000's. He retired a while back and the employer has since gone out of business. We're trying to determine if the policy was paid in full and if benefits are due.

The policy is through MetLife but they said they can't help and that we should contact the employer. Since the employer is no longer in business, is there any thread left to follow?

 

[jeshurun1111]

@weenumsmom Most workplace policies aren't portable and end when your employment does. If he had been presented with the option and had paid to keep it, MetLife would know.

 

[weenumsmom]

@jeshurun1111 That makes sense. We’ll try MetLife again. They didn’t give us any conclusive information, just a “reach out to employer”. Thanks for the info!

 

[sunnysky]

@weenumsmom If it was group insurance, it was a term policy. Contrary to the previous poster, many policies, especially now, are portable policies. I can't speak for what went on in the early 2000's, but, likely that policy lapsed long ago.

Also, MetLife is not the "recordkekeeper" for group insurance, the employer is. MetLife will likely not have record of the policy because the record of who is covered is maintained by the employer and only passed to MetLife upon death to pay the claim.

Since the business is closed, the contract is likely termed, the policy likely no longer exists, and there are no insurance proceeds.

 

[weenumsmom]

@sunnysky Good to know. That would explain the response we got from Met. Thanks for the info!

(Great username btw)

 

[sunnysky]

@weenumsmom

 

[sav3dbyhim]

@weenumsmom Your coverage is done and you no longer have it.

This is 100% why life insurance agents call you when you’re in a union or a group contract because the coverage they give you is the barebones minimum of 1 year salary, 1 & 1/2 years salary, or just basic $4,000 policies or worse. Life insurance for the Unions is pretty much a thing of the past.

It can be Ford Motor Company, it can be The Post Office, it can be the teamsters…Any benefit amounts provided by any company can be negotiated, changed, or dropped at any time.

Please please anybody reading this, consider additional coverage.