When a Life Insurance Policy is Lost

Did you know an estimated $1 billion in benefits from missing or forgotten life insurance policies are unclaimed in America?  One in six hundred benefits are never claimed by the insurance policy owner.  It may be an average of only $2,000 but some payouts are as high as $300,000.  That is a lot of money to ignore.

How does this happen?  Insurance companies use the social security death master file to identify annuity owners, so they stop making payments to them.  But they are not required to check that same file to pay beneficiaries upon death. 

Image by Mariann Szőke from Pixabay

Since you are on your own, Consumer Reports suggests four simple steps to claim an unclaimed life-insurance policy.

  1. Keep the first step simple.  If an immediate family member or other close relative died more than a few years ago, benefits may have been turned over to the unclaimed property office of the state in which the policy was purchased.  Go to the website of the National Association of Unclaimed property Administrators, missingmoney.com to search records from thirty eight states and the Canadian provinces, Puerto Rico and the District of Columbia.  You will need to prove your claim, and required documentation varies by state and province.  If you are missing the death certificate, which is a normal required document, you can go to the vital records office where the deceased passed, or you can logon to vitalchek.com.
  • Reach out to the insurer.  If you know who the insurer is or find it on missingmoney.com, contact that insurer.  Keep in mind, if you are not the executor, you may not be entitled to answers.  Usually the executor and immediate family – spouse, domestic partner, children, grandchildren, siblings, grandparents – have the most legal standing.  The thing is, if the insurer determines you are a beneficiary, they’ll send you a package for verification of identity so you can collect.  If you are not a beneficiary, they will tell you nothing.

Before you contact the insurer, get prepared with as much information on the deceased as you can gather: date of birth, date of death, social security number, last state of residence, policy number, all the information that will help the insurer find the policy in question.

  • Search Personal Records.  If you have the authority to do so search the files of the recently deceased person for policy or policies, premium payment records, or bills/statements from an insurer.  Contact the deceased’s employers, labor union or even fraternal order to check for policies.  Find all safe deposit boxes left by the deceased and check the contents.  Monitor mail, e-mail and any bill payment services for premium invoices or whole-life dividend notices.
  • Beware of scammers.  As part of a settlement with the states, insurers have begun efforts to find beneficiaries, but so have profiteers.  The real agency will not charge you anything to reunite you with unclaimed property, so if someone offers to help you for a fee, just say no.    If you receive a solicitation from an insurer, don’t respond to the phone number or website listed in the correspondence.  Look up the phone number or web address for the insurer’s claims department and contact the company that way.

Losing someone is difficult, but there are steps that will be easier to take in the period immediately following the death than years later.  If you are not expecting to be a beneficiary, but are thinking of making things easier when you pass, consider creating a book for your executor with a list of your policy names, value, location, and best method of contact. 

Need your own insurance coverage?  Contact us at https://proinsurancefinder.com and be paired with an insurance professional who can help you figure out how to protect those you love.