The high cost of outdated records: How better data improves life insurance operations 

insurance agent pointing to contract for signature

Life insurance industry professionals know that even the smallest gap in identity data can have serious consequences. Whether it’s a missing phone number, an unflagged deceased policyholder, or an outdated address for a beneficiary, these information gaps can derail claims, drive costs, and create regulatory risk. 

Yet many insurers still rely on fragmented, legacy data systems that can’t keep pace with today’s operational and compliance demands. To succeed, insurance organizations need powerful solutions that streamline workflows while delivering actionable information. 

The ripple effect of outdated data 

Outdated records don’t just slow down life insurance operations—they’re at the root of claims processing delays, fraud risks, and compliance shortfalls. Insurers face mounting pressure to locate beneficiaries quickly, distribute benefits efficiently, and comply with unclaimed property and escheatment laws. And when policyholder records haven’t been properly maintained, all these efforts become significantly more difficult. 

Unfortunately, this is a common reality across the industry. Many insurers struggle with incomplete or aging contact data, leading to unnecessary delays and increased manual effort. In the most serious cases, failure to flag a deceased policyholder or reach a rightful beneficiary can lead to regulatory fines, reputational harm, and missed opportunities to serve customers with speed and compassion. 

Life insurance fraud is growing more sophisticated 

Synthetic identity fraud has emerged as a growing threat—especially in the life insurance industry. Fraudsters create entirely fictitious individuals by blending real and fabricated identity elements, then use them to open policies with often large death benefits. Without access to comprehensive identity intelligence, including relatives and associative data, synthetic identities can go undetected.  

According to the Coalition Against Insurance Fraud, life insurance fraud costs companies an estimated $74.7 billion each year. Much of this stems from a lack of proactive identity verification and deceased policyholder detection. One real-world case reported a life insurance payout being made on a policy created for a fully-fabricated individual—costing the insurer hundreds of thousands of dollars in fraudulent claims.  

Outdated data and limited regional mapping can leave insurers vulnerable to these schemes; making it harder to catch fraudulent claims before they’re paid and easier for bad actors to exploit gaps in beneficiary information. Without robust tools to verify identities, detect fraud patterns, and map individuals to real-world relationships, fake policies can pass through underwriting unnoticed, and insurers risk issuing payments on invalid claims.  

Why regular data hygiene matters 

Maintaining clean, up-to-date records isn’t just good practice, it’s essential to risk management, customer service, and compliance. Insurers that regularly scrub their data for deceased individuals, verify contact information, and resolve identity mismatches are better positioned to: 

  • Reduce claims cycle times 
  • Minimize fraud exposure 
  • Locate beneficiaries more efficiently 
  • Avoid escheatment violations 
  • Build trust and loyalty with policyholders and their families 

A simple scrub of your existing policyholder file can reveal deceased individuals who may have gone unflagged. Similarly, updating contact records and verifying identity details can eliminate costly delays in reaching beneficiaries during one of the most sensitive stages of the customer journey. 

How IDI helps insurers take control of their data 

IDI’s identity intelligence platform, idiCORE™, is designed to solve these challenges head-on. With real-time, person-centric data covering nearly 100% of the U.S. adult population, idiCORE empowers life insurers to: 

  • Identify deceased policyholders early using public records, obituaries, and proprietary sources 
  • Locate hard-to-find beneficiaries with updated contact intelligence and address histories 
  • Verify identities and relationships between deceased individuals and listed beneficiaries 
  • Prevent fraudulent claims before they’re paid 
  • Detect synthetic identities using relational mapping and robust identity verification 
  • Stay compliant with unclaimed property and escheatment laws 
  • Accelerate claims processing while minimizing manual effort 

Whether you’re trying to reduce delays, improve operational efficiency, or meet strict regulatory requirements, better data is the key to doing it faster—and doing it right. 

Ready to see the difference? 

IDI can run a no-obligation batch test to compare our deceased scrub and contact resolution accuracy against your current provider. You’ll see firsthand how our real-time insights and unmatched identity intelligence can strengthen your claims process and support compliance with confidence. 

Contact us today to schedule your data test or request a walkthrough of the idiCORE™ platform.