A life insurance policy is an important investment in your family’s security. You hope that you won’t need it any time soon, but you know it’s there to protect your loved ones when you can’t. We place our trust in the insurance companies who sell this peace of mind. So what happens when that trust is broken?

Over the last several years, there have been multiple reports of insurance companies across the country avoiding their responsibility to pay out the life insurance benefits they owe. This is a breach of trust, and it should be illegal. Unfortunately, insurance companies have found a way to skirt the laws that protect consumers.

As detailed in a 2010 report from National Public Radio, military families have been targeted by insurance companies that offer to “hold” benefit money for them. The companies gave families who had just lost a loved one—often a service member— checkbooks to access the money. The companies pretended to sweeten the deal with the promise that the money would earn interest as it sat in the account. Meanwhile, the insurance companies invested that money in accounts that earned five to 10 times the interest they paid families and pocketed the difference. These accounts weren’t insured, so if the insurance companies failed, the families lost their money.

This deception needs to end. That’s why I’m working on legislation to require life insurance companies to tell families that they have a right to all of the money in their benefit and if they choose to leave their money with the company, it’s not insured or earning a good interest rate.

A “Sixty Minutes” report from 2016 revealed that insurance companies have also found other ways to take advantage of families when they are most vulnerable. There have been millions of cases across the country where insurers knew that a policyholder had died but, because official claims weren’t filed, were able to cancel the policies for non-payment and kept the death benefit for themselves. In an even more disturbing twist, if the insurance company had access to the policyholder’s retirement account, they continued to charge for coverage after the company knew they had died. Not only did they avoid paying out the death benefit, they also drained retirement savings that should have gone to the grief-stricken family.

These practices are a clear breach of trust. In some cases, the behavior of insurance companies amount to theft. These companies are undermining the entire premise of insurance in the first place. In response, I’m working on another bill that would require insurers to make a good faith effort to contact the beneficiary of a policy, even without an official claim.

Besides legislation, there are steps you can take to protect your family from these predatory practices. The most important thing you can do is to develop a relationship with a local insurance agent. Many of the policies that have taken advantage of families have originated without any human interaction. It’s always better to place your trust in a member of your community.

People should be able to trust that the benefits they have paid for will be there for their families. I hope that, as a member of the Legislature, I can stick up for the families who may be targeted by these policies.

If you’re interested in this issue or any other issue, feel free to contact me at (207) 287-1430 or maureen.terry@legislature.maine.gov.