It's a problem you don't want to have: A relative dies and you
have no idea which company holds his or her life insurance policy.
Where do you begin? And if you can't find the life insurance policy
right away, can you still collect the death benefit in the
Hope they paid their life insurance bills
Tips for making sure your beneficiaries get your death
First and foremost, give your beneficiaries your life
insurance policy information! You may feel like this is an
awkward conversation, but letting beneficiaries know where
you keep the policy, or giving them a copy, ensures they
can claim the death benefit for which you've been
Life insurance buyers' main reason for wanting to keep
life insurance "secret" is because they don't want to start
quarrels among family members over who receives what.
Keep all your financial records (especially your life
insurance policies) in one place. You don't want your
family to have to conduct a massive search for your policy
information and other crucial records.
If you're a beneficiary to a life insurance policy and you have
located the paperwork, first check to see if the policy was a term
life insurance or a permanent life insurance policy. If it was a
term life insurance
policy, you'll receive the death benefit if the insured person
passed away before the term ended. If the policy expired before the
date of death, you don't have a claim.
If the person had a permanent life insurance policy, you'll
receive the money if he or she died while the policy was "in
force," meaning the premium payments had been made up until the
If it takes you a while to find the life insurance policy,
you'll receive the benefit plus interest from the date of
If the insured person failed to make premium payments on a term
life insurance policy before his death, the policy likely "lapsed"
and was not in force. However, when a permanent life insurance
policy lapses, most life insurance companies do one of two things
when they don't hear from the policyholder:
- Switch it to a "reduced paid up" policy - The insurance
company keeps the policy in force permanently but at a lower
death benefit that is determined by the cash value amount.
- Switch it to an "extended term" policy - The insurance
company uses any cash value that has built up in the policy to
convert it to a term life insurance policy for the same death
benefit. The policy term continues for as long as the cash value
can cover premiums.
Life insurance companies usually use one of these as a "default"
option when any whole life insurance policy lapses. If the policy
lapses and an extended-term period expires before the insured dies,
the policy is worthless.
But if the policy lapsed because the insured died and thus
premium payments stopped, the beneficiary will collect the full
death benefit, regardless of when any extended term period expired.
You must send the life insurance company a copy of the death
certificate for it to confirm date of death.
No matter when you find that policy, if it was in force at the
time of death you can collect on it, even decades later.
What happens if no one ever reports the death?
Insurance companies routinely take steps to find out why a
policyholder has stopped making payments, including sending letters
to the last known address. But if a beneficiary never steps
forward, the unfortunate outcome is that someone has paid for a
life insurance policy that never benefits his loved ones.
In rare cases, when a beneficiary cannot be located over the
course of a few years and the insurance company knows the insured
person has died, the death benefit may be ultimately turned over to
the state, where it becomes "unclaimed property" and waits to be
found. However, life insurance companies generally have no way of
knowing when an insured person has passed away. You can contact the
state's comptroller department to see if it has any unclaimed money
from life insurance policies belonging to the deceased.
You can also get help at places that assist with unclaimed
property. In addition to lost life insurance policies, these firms
can help locate lost funds in bank accounts, unclaimed tax returns
and lost stocks.
Tips for looking for lost life insurance policies
- Look for evidence of premium payment. Go through canceled
checks or contact your deceased relative's bank for copies of old
checks. If your relative wrote checks to pay premiums, the
insurer's name should be written on checks. Also, some banks sell
life insurance policies to customers who own checking or savings
- Check old credit card statements. Your relative may have paid
premiums by credit card.
- Contact your relative's current and previous employers to see
if he had group life insurance.
- Look for insurance-related documents in files, safety deposit
boxes and other storage areas. Look in address books for contact
information for insurance agents or life insurance
- Contact current and prior financial advisors who may have
known about the life insurance policy.
Review your relative's income tax statements for the past two
years, looking for interest income from and interest expenses paid
to life insurance companies.
why your life insurance company doesn't care if
Several states have databases to help locate policies
that were purchased in that state
Services to help you find lost life insurance policies
The best starting point is to make sure your policy isn't lost
in the first place. That's the sole responsibility of the
policyholder. When that doesn't happen, there are services to help
FindYourPolicy.com offers a life insurance policy registry. You
can store your name and insurance company names for free. You do
not have to enter your full social security number, policy number
or other account information. Beneficiaries can search the database
If your relative bought life insurance within the last 14 years,
MIB Group likely has records showing the insurers to which he
applied. MIB maintains a database of life insurance application
data that insurers use to reduce fraud. Records won't show from
whom he purchased a policy, but they will show any trail of
applications. Record searches can be requested through MIB's Policy
Locator Service and cost $75 each.
Paul Archibald, a retired insurance professional in Virginia,
runs a Lost Life Insurance Finding Expert service. Archibald will
fax letters to customer service centers at insurance companies,
asking if your deceased relative had any life insurance policies
which designated you as the beneficiary. If the insurer finds a
policy, Archibald then asks the company to contact you directly to
start the claim process.
The National Association of Unclaimed Property Administrators
offers a MissingMoney.com website where you can conduct a free
online national search for missing money, including life insurance
policies. You'll be successful only if the policy has been deemed
unclaimed and transferred to the state.