If a loved one has named you on a policy that covers life insurance, you may have money in the form of a check for life insurance. It’s not as common as you might think.
Consumer Reports found that 1 in 600 people are beneficiaries of unclaimed life insurance policies with an average benefit $2,000. This could be like discovering you have secret savings accounts. A life insurance beneficiary is someone who receives the payout from your life insurance when you die.
Life insurers, which paid out $747.4 billion in benefits in 2020, make efforts to find the rightful owners of unclaimed insurance policies, says Whit Cornman, a spokesman for the American Council of Life Insurers.
He says that insurance companies actively search for beneficiaries and some companies even have entire offices dedicated to this purpose.
States want them to do more. Numerous states have pressed insurance companies to pay $7.4 million in unclaimed death benefits over the past few years. Nearly half of the states have passed laws requiring that insurers conduct a search by Social Security number for policyholders who have died and then perform systematic searches to find the beneficiaries.
Do some research to discover how to get a life insurance policy.
How do I find unclaimed life insurance policies?
People take the time to create life insurance policies in order to provide for their loved ones after they pass. It is important to know the legal name and address of your relative. These steps will increase your chances of finding unclaimed life insurance policies.
Look for insurance policy paperwork
“If the death occurred fairly recently, check the mail and bank statements for premium payments or policy-related materials,” says Steven Weisbart, senior vice president and chief economist for the trade group the Insurance Information Institute. For any communication or transactions relating to insurance, make sure you check your address books.
You can check the safe-deposit boxes and review any personal files if you are the executor of the estate. If you have Power of Attorney, you can also visit the bank of your deceased relative to request papers statements. If you don’t have their online account, this will allow you to locate who they paid premiums.
Get in touch avec employers
You can contact any former employer of the deceased to get any information regarding their insurance policies.
Find the right insurance company
You can find proof of a policy and identify the insurance company. This is the most important step. If beneficiaries are unable to locate the insurance company on a policy, they should contact their state insurance department.
If you have an insurance company, follow the steps to file a claims. If you provide all information and the insurance company approves the claim, they will usually pay the claim in a timely fashion.
Make sure you are in the right state
It is important to find out where the policy was purchased. Jeff Blyskal (Consumer Reports senior editor), notes that even if your relative dies in Ohio, they may have lived in Illinois at the time they purchased life insurance.
The state insurance commissioner should keep records of any policies that were lost or destroyed by an insurance company.
Rating services are available.
An insurance rating agency, such as AM Best, could help you track insurers, including those that are defunct.
Find a financial connection
Weisbart states that if a relative worked for an accountant, financial planner or insurance agent, they may be able to identify the insurance company that a policy of life insurance was issued by. This could mean providing information to verify your identity, and to confirm that you are the executor/power of attorney of the deceased.
Turn to a missing policy locator
The National Association of Insurance Commissioners’ Life Insurance Policy Locator Service and similar services allow consumers who believe they are the beneficiary of a life insurance policy to submit a life insurance policy search by name and request to have insurers check their files. For individuals who need to retrieve policy information, these systems can be used as a starting point.
Search for unclaimed property files
MissingMoney.com, a database endorsed by the National Association of Unclaimed Property Administrators, allows you to search for unclaimed property in most states. You only need the name of the deceased, the city, and the state to start your search. Then, you can do the research online.
Get in touch with the former employers of the deceased
Most term life insurance policies purchased through an employer are only for the duration of the employee’s employment. However, it is possible that the policy will be continued by the individual after the employee leaves the company. It is worth speaking with former employers, labor unions, or professional associations to find out which insurance company they have.
Many companies don’t give out any information about employees other than when they worked there and what their position was. Asking them which life insurance company they use can help you get around this.
You can pay for a search in the MIB database
The MIB (which once stood for Medical Information Bureau) is a cooperative database created by life insurance companies to keep track of insurance applications. Weisbart says, “I wouldn’t recommend doing it first, but you can pay $75 for a search if you are certain there is an insurance policy that belongs to you.”
Once you have found the insurance company, call them to verify that the policy is still in effect. The insurer will provide steps to help you file a claim if it is still active. These instructions should be followed closely to reduce the chance of your claim being denied.
How to avoid unclaimed life insurance policies
Although it’s too late to ask for information about the policies of deceased relatives, you may still be able to learn from your relative so that the next generation doesn’t have to search for unclaimed life insurance.
Tell your family members if you are covered under life insurance so that they do not become unclaimed beneficiaries. To make it easier for your insurance company to locate your beneficiaries, give as much information as you can to your insurance company, including their names and addresses. It is a good idea for family members to have life insurance paperwork stored in a safe place.
Questions frequently asked
What happens to the unclaimed life insurance money
Certain states are putting pressure on life insurers to pay unclaimed death benefits. Insurance companies routinely check Social Security data to verify that policyholders are still living. They’ll conduct research to locate the beneficiaries if they learn that a policyholder has died.
What is the maximum time a beneficiary has to claim a policy of life insurance?
There is no time limit on when you can file for a benefit. Insurance companies, however, don’t have this luxury. Many times, claims can be paid within 30 days after approval.
Is it possible to search a database for unclaimed life insurance benefits
Missing Money has a database that may help you see if you have unclaimed life insurance benefits. You only need the name and state of the policyholder, as well as the state in which they bought life insurance.