Unclaimed Life Insurance: Where To Find It & How To Claim It


7 September,2017

I’m sure you can agree with me that searching for a life insurance can be time-consuming and seem pointless.

But hear me out:

What if I told you that you can find lost life insurance faster than ever now and that there are even several companies that assist you with finding these policies.

Today I am going to go over with you what unclaimed life insurance is, why it exists, how and where to find it and how to claim it.

What Is Unclaimed Life Insurance

When your loved one takes a life insurance policy on themselves, the last thing they would imagine is that you never actually received the benefits because you didn’t know they had a policy or couldn’t find it.

These lost life insurance policies eventually become unclaimed life insurance and are waiting to be found and for a claim to be made against them.

Unfortunately, this happens every day.  According to a study done by Consumer Reports in 2013 1 in 600 people have an unclaimed life insurance policy and life insurance companies held around $1 Billion in unclaimed life insurance, that number has since risen to over $7 Billion now.

Yes, Seven Billions!

This amount might seem unbelievable, but it’s the truth, and we have to get ahead of this.  There is no reason to let insurance companies sit on this wealth that could be changing the total economy of the united states.

How Does Life Insurance Become Unclaimed

There are several ways life insurance policies can become unclaimed, below are a few of the ones I think tend to create the most unclaimed life insurance policies:

Parents Don’t Talk To Their Kids About Their Life Insurance

I have seen first hand a parent’s inability or unwillingness to talk to their children about life insurance.

You hear the everyday things like “It’s personal” or “it’s taken care of” or “Don’t worry about it”.

For some reason, for my parents who are Baby Boomers, they didn’t like to talk about life insurance, and not until a few years after I became an agent did I start pressing the issue.

I found out they didn’t have enough insurance (so I fixed that issue), and that the policies they did have were whole life policies purchased years ago.

I probably would have thrown the actual policies away because they kept them inside a folder inside of a pile of other documents.

If your parent isn’t talking about this, you need to get on top of it.  Find out what they have, if they are currently paying anything and where these policies are located and who the company is.

The Insurance Company Doesn’t Know A Death Occurred

There is no way for an insurance company to know that someone insured with them has died.

Especially when you are talking about policies that have been “paid-up” or that are on an automatic draft.

If payments are still coming in or the policy is paid up, the money will just keep being available until a time a claim is filed.

If no one ever reaches out to the insurance company to advise of the death, the insurance will become unclaimed.

Outdated Or Inaccurate Beneficiary Information

When an insurance company does eventually find out a death has occurred, they will try to search for the recipient.

The only issue is that a majority of policies don’t even require social security numbers for a beneficiary. They are fine with just a name, phone number, and address.

All three of those things can change within a few weeks of someone getting married or getting a new job.

Life events can quickly make beneficiary information outdated, and if it has been several years, it’s even harder to track down an heir, and this will lead to an unclaimed life insurance policy.

The Insurance Company has Vanished

Every day in the insurance world there is consolidation happening.

Smaller companies may no longer be able to deal with the financial burden, and they sell to a larger company, or a more major company is looking to expand and buys a life insurance company.

There is also re-branding that happens all the time.

I was just recently talking to a friend of mines, and he was telling me about how one of his insurance policies kept switching carriers and how frustrating it is to keep up with the changes.

Luckily for him, he is a licensed agent, so he understands the process. However, the average person probably won’t even know it’s happening, and over time this policy will become unclaimed.

How To Find Life Insurance Policy Documents

If you find yourself in a position where you can’t locate the life insurance documents of someone that has passed away.  Below are some quick steps you can follow that will help you unearth anything that could be out there:

Search Bank Records And Credit Card Statements

Almost all of the life insurance carriers I work with take payment either by Monthly Bank Draft or Credit Card.

The fastest way to find out if your loved one had a life insurance policy is to go through the last year of their bank or credit card statements and look for withdrawals from life insurance companies.

The reason you want to go back a year is that life insurance companies do give the option to pay Monthly, Quarterly, Semi-Annually or Annually, so if you only search three months back, you can miss it.

Check Email and Snail Mail

If an insurance company was expecting a premium payment and they don’t get one because the insured has passed away.

They will send out a letter to let them know that they missed a payment and that the policy is in danger of lapsing.

This notice is a solid indicator that your loved one had a life insurance policy and it will give you all the information you need to find the plan and file the claim.

Check With Banks for Safety Deposit Boxes

Some people like the idea of keeping their financial documents offline and in a safety deposit box at a bank.

If you are the beneficiary of your loved one’s bank account, then check for a safety deposit box.  It could hold all the life insurance documents.

Reach Out To Their Previous Employer

I know that my father has a small insurance policy through his job.

However, most of us don’t know that we can reach out to their previous employers to see if they had life insurance and we can also search old check stubs to see if life insurance was being taken out in any of the pay periods.

How to Prevent Unclaimed Life Insurance

This issue can be avoided by taking a few small steps ahead of time like:

Talk To Your Beneficiary About The Policy

Not talking about your insurance plan is the largest reason so many policies go unclaimed in the life insurance industry.

No one knows they exist.  You completed the hard part; now there’s no reason to finish this simple step.

Tell Someone Without Insurable Interest

When someone has an insurable interest, it means that if you were to pass away, they would be affected financially.

It’s best also to let someone know about your policy that will not be financially affected by your death.  This person will vary for everyone.

Have A Secondary Beneficiary

It might not be good enough to have only a primary beneficiary.

What happens if you and your primary beneficiary pass away at the same time?  Who would the money go to now? Who, besides you two, would know it existed.

Try to have a secondary beneficiary, someone like a parent or grandparents.

Get An Executor To Read Your Last Will & Testament

I’m sure you have seen plenty of movies where this takes place, even though it doesn’t quite happen like that.  It is an excellent way to make sure your family and loved ones know and find out about if any insurance policy existed.

Use An App

There are apps out there like My eVault that allow you to keep track of financial documents for situations just like these.

How To Find Unclaimed Life Insurance Money

If you have exhausted all of your manual options to find life insurance money, several places can help you with your search:

  • The National Association of Insurance Commissioners (NAIC) who has a Life Policy Locator Service.
  • The National Association of Unclaimed Property Administrators (NAUPA) has a free website at unclaimed.org that will link you to the appropriate department in your state that holds funds from things like abandoned safety deposit boxes or uncashed overtime checks.
  • MissingMoney.com offers a free search for states and provinces that participate. This site allows you to search more than one state at a time for an unclaimed life policy.
  • Some companies like Metlife and Statefarm have decided even to create a tool to find unclaimed life insurance policies.
  • For a $75 Fee, you can use a Policy Locator Service offered by MIB (Medical Information Bureau) to assist you with finding a lost policy.

These are some of the best tools at the moment to find any unclaimed life insurance policies and money.

Since the databases are continually being updated, I would recommend doing this search at least once a year.

What To Do When You Find The Money

Once you locate the company and confirm that you are indeed the beneficiary of a policy, the next step is to file a claim.

You would just need to get a copy of the death certificate and reach out to the claims department of the insurance company that held the insurance.

After a few weeks of verifying everything, you should have more than likely a lump-sum payout from the insurance carrier of the benefit.

If you received a payout and aren’t sure what to do with the money, check out this post where I asked over 30 experts how to invest life insurance proceeds. They gave some great answers that can help anyone get started with managing a lump sum payout.

It’s A Task Worth Doing

Finding unclaimed life insurance is a task worth doing.

Your loved ones expected you or their descendants to get the money to better their lives and the only people benefiting from it is an insurance company that is just sitting on the money.

This statement is not to make them the bad guys, in some cases, there just isn’t anything more they can do.

Overall we need to stop unclaimed life insurance at its source, and that is our lack of communication and preparation for when we pass away.