What is an Unclaimed Life Insurance Policy and How Do You Claim Benefits Owed to You?

A life insurance policy goes unclaimed when an insured person passes away and the named beneficiary does not claim the death benefit from the policy.  This is an incredibly challenging situation. The question is WHY DOES It HAPPEN?  I developed a video that explains the importance of identifying and accessing unclaimed insurance that may be owed to you…

There are five primary reasons why benefits go unclaimed. Each of these reasons can be easily remedied using the MyMemorial system.  So, let’s take a look at the 5 reasons first why life insurance benefits might go unclaimed:

First, the life insurance company and the policy owner have lost contact with each other.

Normally, the primary mode of contact between you and insurance company is by “snail” mail or regular US postal mail. Often, individuals move and neglect to update their mailing address with the post office. And if the Individual takes the proper steps to forward their mail, The Post Office will only forward it for a year. If the sender (in this case the life insurance company) is not aware that the mail is being forwarded to a new, they will not update their records.

Second, The life insurance company doesn’t know the insured has died.

This reason is often met with great skepticism because all insurers have access to the Social Security database of deaths. Often, life insurance companies contend that they do not know a policyholder has died until the deceased’s family member contacts them. Even if a policy is in a premium-paying stage and the payments stop, the insurance company has no reason to assume that the insured has died.

Third, the life insurance company is unable to contact the policy’s beneficiaries

This scenario may contain one or two problems. The first is that the identification of the beneficiaries might be insufficient. for example, if the beneficiary designation says “my wife” or “my children” without naming them specifically and, ideally, providing a Social Security number and a current address for each one, the insurer will not be able to contact them. Second, even if the company knows who it is looking for, it may be very difficult to track down a beneficiary, especially as it may be many years, or even decades, since the policy was taken out. The beneficiary may even be deceased as well.

Keep in mind that, for privacy reasons, until the death occurs, the life insurer cannot even respond to a beneficiary’s inquiry as to whether they are a beneficiary or not.

Fourth, beneficiaries are unaware they have been designated as a beneficiary on a life insurance policy.

It may come as a surprise, but sometimes the policy holder may not inform the beneficiary for a variety of reasons including wanting to avoid any drama or confusion within the family. Other times, they simply forget to inform the beneficiary. Unfortunately, the consequence is that the benefits could end up unclaimed because no one knows they have the right to do so.

Finally, The original life insurance company no longer exists or cannot be located.

The name of the company that sold the original life insurance policy may have changed, possibly making it more difficult for the beneficiary to locate the insurer in order to make a claim. Life insurance companies are not any different from companies in any other industry in this respect—but the multi-decade length of the contract can transform this type of normal corporate development into an extra hurdle for beneficiaries. Some will not know where or how to look for the new insurer, leaving the benefits unclaimed when the insured dies. Typically, an insurer that is changing its name or location will notify its policyholders of such a change. However, if the policyholders informations not kept current as previously discussed, that information will not be forthcoming.

What are 4 Steps that You Can Take to Find Out if an Unclaimed Life Insurance Policy Exists?

  1. Check with state officials.

Go to the National Association of Insurance Commissioners (NAIC) Life Insurance Policy Locator System Page at NAIC.Org and search for Policy Locator Service.

This organization will check with participating insurers to see whether there is a policy in your deceased loved one’s name.  Also, check MissingMoney.com to see whether you have any other money available.

  1. Find evidence of past payments.

If you’re uncertain about whether your loved one had a life insurance policy, do an extensive search through file cabinets and safety deposit boxes to uncover old billing notices or receipts for paid premiums. Also search bank statements, canceled checks or credit card statements to find any record of past premium payments.

  1. Contact Advisers and Employers.

Look through address books, old mail, and employment records to find contact information for your loved one’s financial adviser or employer who may have information regarding a policy.

  1. Review Tax Returns and Other Policies.

Old tax returns can give an indication that a policy has been paid.  Look for interest payments from an insurance company. this is a sign of the existence of a policy.