It has typically been the responsibility of beneficiaries to notify insurers of a policyholder’s death, but a series of national agreements between states and roughly 20 life insurers showed that $4.4 billion in policy proceeds had not gone to beneficiaries.

Franklin Freeman, a lobbyist for the National Alliance of Life Companies, which includes smaller life and health insurance companies, said requiring companies to go through hundreds of thousands of old policies recorded on paper would cost the companies more than what the policies were worth. Most of the policies in dispute paid death benefits of roughly a few hundred to a few thousand dollars.

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