You aren't going to be able to take those frequent flier miles with you on that trip to the great beyond, but have you thought about what will happen to them once you pass on?
If you haven't, you're not alone. Even though outstanding frequent flier miles and other loyalty reward points are worth almost $50 billion, just 12 percent of U.S. consumers are aware of their programs' policies for passing on points, according to the report, "Inherit the Windfall: Passing on Loyalty Points," by Colloquy, which focuses on the loyalty marketing industry.
The popularity of loyalty programs continues to soar. Americans have 2.65 million memberships in loyalty reward programs, according to the 2013 Colloquy Loyalty Census. That's up 26 percent from 2011.
"The more the population ages and people accumulate points, the more potential there becomes for it to be an issue when someone dies," says Jeff Berry, Colloquy's research director, who authored the report.
The report, which included results of an online survey of more than 1,200 consumers, found that 76 percent of respondents have never considered the bequeathment policies of the companies with which they have loyalty memberships.
"If you're getting on in years, it's something you might want to give some consideration to, especially if you're in a situation where you've accrued a significant number of miles," says Tim Winship, an expert on frequent flier programs.
"There tends to be among mile collectors a sort of hoarding mentality," Winship says.
Those people tend to think, "'At some point when I have more time I will redeem them for a dream trip,'" he says.
Redeem or donate
While anyone at any age can die or develop health issues that make it difficult to travel, Winship says those in their 60s or older who are sitting on a stack of points should start considering what to do with their miles.
One option is to redeem the miles for tickets issued to other people, Winship says.
Another option is to donate the miles to charity, he says. United Airlines' website, for example, says miles can be donated to a wide array of nonprofits and are used for everything from providing air transportation for someone in need of life-saving medical treatment to fulfilling the wishes of a terminally ill child, to flying family members to the bedsides of injured soldiers.
If you want to pass on points to a loved one after your death, simply trying to sort out the programs of airlines, hotels and other companies that offer loyalty rewards is a challenge in itself.
Companies' policies vary
Colloquy's staff found companies' polices were all over the map. Some allowed points to be inherited, some did not. Some allowed them only to be transferred to a spouse, partner or joint account holder. Some charged no fees for a transfer, others did. Many companies' policies were not posted online, and often customer service representatives were unaware of their company's policies.
Along with variations among companies' policies, there also are often variations within a company itself. The rules may say one thing, but a customer service representative might say something else.
So an airline's policy might state you can't transfer points after someone dies, but when you call to inquire they'll allow you to do so anyway, he says.
In many cases a death certificate or other legal documents are required before a transfer to prevent fraud, Berry says.
While it's up to companies to decide whether to allow someone to pass on points, Berry says that whatever they choose, the information should be readily available and not hidden in the fine print of the loyalty membership agreement.
Berry contends companies should make it as easy as possible after someone has died for family members to find out if they can claim the points. "It's a sensitive time for the family," he says.
Some people get around the policies surreptitiously by using their loved one's account numbers and passwords to access their loyalty points, he says.
Part of the problem could be that companies don't consider points to be an asset that actually belongs to a program member, Berry says. But members may have a different point of view.
If someone has a half-million or a million frequent flier miles, "That gets to be quite valuable," says Gerry Beyer, a professor at the at Texas Tech University School of Law and an expert on digital assets.
For most people, it takes years to accumulate a huge stack of points, and during that time the policies surrounding the rewards program might change, Beyer says.
Or you may find that the written policy "says one thing, but they might do something different, depending on who you get when you call on the telephone," Beyer says.
One option for dealing with points is to include them in your will.
Robert Kirkland, president of the Kansas City-area law firm Kirkland Woods & Martinsen, says his firm has had a standard clause in wills on the disposition of loyalty points for more than a decade. The program member might choose to pass them on to a spouse, children or close friend.
The loyalty points clause is included in every will because, "Even if you don't have [points] today, this will may still be valid 20 years from now," Kirkland says.
He also advocates including such information in a power of attorney form so it's clearly spelled out who can deal with a company if an individual is unable to do so themselves. "More and more people are becoming incapacitated before they die," says Kirkland. As a result, "a power of attorney is just as important as a will."
He recommends loyalty program members keep their account numbers and passwords stored in a secure location, such as in a safe deposit box, and accessible to loved ones. "Make sure your family is aware of what you have."
- Some frequent flier miles, reward points can be inherited
- As airlines merge, frequent flier miles decline in value
- When bankruptcy freezes an airline credit card, what happens to the miles?
- Jeff Berry