by dflores777 » Sat Aug 18, 2012 09:22 pm
My husband's father passed away and had 2 life insurance policies - when the family reported his death, the insurance company is requesting a copy of creditor assignement from the bank dated 2/19/76, a claim form from creditor and balance owed? My ?? should the life ins company have a copy of creditor assignment and what if the family can not locate the bank that had creditor assignment? How long do banks need to legally keep information on file? please advise thank you
Posted: Sat Aug 18, 2012 09:37 pm Post Subject:
I posted the response below following your duplicate post in the Auto Insurance forum:
Actually, the insurance company, the policyowner/insured, AND the creditor should all have copies -- they all did in 1976. The insurance company especially, because it represents a lien against the death benefit superior to that of the beneficiary. If you are the beneficiary and/or executor/representative of your father's estate, the insurance company should tell you who the creditor/assignee was.
From whom would your father have borrowed money (not necessarily a bank, could be a private party) in the past and pledged some or all of his life insurance proceeds to? His banking records should reveal that information, too, if he were still making loan payments at the time of his death.
The creditor needs to maintain records indefinitely because it has to prove to the insurance company what is owed. In the absence of proof of claim, the insurance company may stall the payment of the death benefits or turn the matter over to the Probate Court, assuming there is a probate action open.
Here's the real issue: The assignment was recorded with the insurance company, that's why they are asking for the creditor to file a claim (not you). The credit obligation was created 36 years ago. I would have to believe whatever the debt was, it was repaid long ago. When that happened, the creditor should have signed a release form revoking its right of assignment.
That's what you probably need to locate. The creditor should have a copy of that, too. If it's not in an eletronic file, it's on microfilm or microfiche somewhere.
You have a difficult, but not impossible task to accomplish. It may require involving an attorney and/or a private investigator to locate and obtain the documentation you are seeking.
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