For most beneficiaries, an unclaimed life insurance policy is difficult to find. Because so many insurance benefits are often unclaimed. Many people do not know that they are also beneficiaries or that a life insurance policy exists.
Assistance for Unclaimed Life Insurance Benefits, Policies, and Regulations
There are specific procedures and steps that insurance companies require to follow if they are no longer able to find the insured after payments have expired. Policies differ depending on whether the policy is a life term or life insurance; but, in almost every case, the beneficiary is a certain benefit. Only in a few cases will the recipient not receive anything, and that is usually when one:
- The life expectancy policy ran before the insured died
- When so long that the cash portion of a protracted and long-term policy expires
Why Unclaimed Life Insurance Policies exist
Unlike other types of insurance, when benefits are most needed is also when it is most difficult to find suitable claim paperwork. When you are in a car accident or you need health services, you are the person who needs benefits from your car insurance to pay for car repairs, or from health insurance to pay hospital bills. However, when it comes to life insurance, you won’t pay the final bill – it will probably be your beneficiary. Due to this fact, about half of all life insurance policies are unclaimed. There are certain things you need to prepare for the same day that you buy life insurance so you can be sure your own policy will not be claimed:
- Prepare a “Final Authorization and Agreement” and make sure that your life insurance is mentioned.
- Submit your wishes with contact information for the life insurance company, including your policy number.
- Even if you name a beneficiary at the insurance company, be sure to include that desire in your will so that there is no uncertainty.
- Keep your insurance policy documents either in a safety deposit box (with account information included in your will), or in a labeled (or fireproof safe) file cabinet in your home.
- Most importantly, talk to your recipient about what you are doing.
One of the main reasons why many life insurance policies are unclaimed is because people have an almost superstitious tendency to avoid talking about death. By avoiding this topic, the only thing you do is avoid the inevitable. If you’re talking about what you want to happen when you disappear (and we all do at some point), then your wishes are more likely to be executed. If you don’t discuss it with anyone, the fate of your policy and the well-being of your family will not be certain.
If You Are a Gift Recipient
If someone you are close to is dying and you are definitely convinced that you may be the beneficiary of their life insurance policy, but they never discussed the matter with you, you can still receive the benefit, but it will take a bit of practice.
There are various methods you can use to determine if someone who has just died has a life insurance policy. Especially convenient if you are listed at their will as an “Executor”, in charge of the farm – which means you have access to records you don’t know about.
- Check their bank records for checks made to insurance companies. One of them will most likely be a life insurance company.
- Contact their employer. Most companies offer life insurance benefits as part of a regular compensation package.
- Check their federal income tax returns for the past few years. Often when the cash portion of a policy benefits, it can be reported.
- Work with other family members who may have access to information about relatives’ financial matters. While it can be an interesting subject, the whole family is responsible for funeral services and other costs, so it benefits everyone to work together to cover those expenses.
How to Find Unclaimed Funds
If it has been a long time since the person died, even a decade or two, it is still possible that the life insurance collection could be collected by the recipient. Unclaimed life insurance policies must be reported in most states. The insurance company must file an unclaimed or “expired” policy to the government, including all funds. The government declares these funds as “unclaimed property” with the beneficiary as the owner. The best way to determine if the fund exists where you are listed as a beneficiary is to search the state database where you live. Unclaimed.org, a website sponsored by the National Association of State Treasurers, can help you find your state agency through an interactive map of the United States.
Even if you only vaguely suspect that someone who died many years ago may have placed you as a life insurance beneficiary, you will be worth searching your state database for any unclaimed property with your name listed as the owner. If you find any listings, follow the website’s instructions to claim the property and collect the benefits you receive.
Use Caution
There are many websites on the Internet that claim to provide free searches for “unclaimed property”. In most cases, websites will either charge a fee or will collect personal information about you for sale to spammers or marketers. Avoid random websites and stick to State agencies that actually have the funds you are looking for. With a little luck, you may find that you are a longtime beneficiary of your long-deceased uncle who passed away many years ago