A 2016 CBS 60 Minutes report revealed that audits of the largest U.S. life insurers led 25 carriers to dole out over $7.5 billion in unpaid benefits. Before that, a 2011 audit ordered by the Texas Comptroller’s Unclaimed Property Division uncovered over $178 million worth of unpaid proceeds due to Texans.
There are steps you can take to find a lost policy and obtain its benefits if you believe you may be the beneficiary.
Why Life Benefits Go Unclaimed
Life insurance proceeds can go unclaimed for a few reasons. Sometimes beneficiaries don’t know they're named on the policy, or that one even exists. They may have moved from the address listed on the contract, so the insurer can't locate them. They may not know how to file a claim if the insurer goes out of business and transfers its policies to another without notifying beneficiaries.
The insurer may lose contact, ending the paper trail, if the policyholder moves and doesn't submit a change of address. In some cases, the insurer doesn’t know they've died because no one sends a death notice.
Who Can Claim a Lost Policy
A beneficiary should file a claim after a death, but an estate lawyer, trustee, or family member might file the claim instead. Funeral homes may do so when the proceeds will pay for burial expenses. But only beneficiaries can collect the benefits even if someone else files the claim.
What you must submit to file a claim can vary by insurer. You may need to provide a few things:
- The deceased’s Social Security number
- Their dates of birth and death
- The manner of death, such as natural causes
- The name of the funeral home
- One or more copies of the death certificate
- A copy of the beneficiary’s government-issued ID, such as a driver’s license or passport
Some insurers will allow you to submit a claim over the phone or online, while others will make you do so via snail mail.
Search for Unclaimed Benefits Online
You can turn to the National Association of Insurance Commissioners (NAIC) Life Insurance Policy Locator Service if you’re unsure if a loved one had one. This online service asks that you to enter data about the deceased, such as their name, last known address, dates of birth and death, and Social Security number.
The NAIC then submits this information to participating insurance companies. Each carrier then searches its records to see if your loved one’s data matches the data of any of its policyholders.
The NAIC’s locator service doesn’t provide instant results. It can take up to three months before they find a policy for your loved one, then it may ask you to send a copy of the death certificate before you can move forward with a claim.
The NAIC’s free locator service helped more than 46,600 beneficiaries find policies and annuities with payouts of more than $650 million by 2019.
It's best to use this service shortly after a loved one passes. Go to the National Association of Unclaimed Property Administrators (NAUPA) website if you don't begin your search for years after a loved one has died. The site includes a map that links to the unclaimed property units in every state. They oversee all types of unclaimed funds, including life insurance. You can search its records.
You can file a collection request if you find proceeds or other funds that are owed to you. The agency will likely contact you via email, telling you how to claim your money. They may request a copy of your ID, your Social Security number, and proof that you reside or once resided at the address associated with the lost property.
Processing times vary by state. It can take up to 180 days in California.
Other Places to Find Information
NAIC and NAUPA can help you find a lost policy, but they can take three to six months to do so. It's often easier to find it through old-fashioned detective work. You have a few options here.
Search for Files
Search for financial documents in your loved one’s home and safe deposit boxes, if you have access to them. Keep in mind that some people store papers in odds ways, such as in shoe boxes, bags, under beds, and in dresser drawers. Search for applications because these may list other policies.
Look through the deceased’s mail for dividend or premium notices. Review all bank statements, searching for payments that were made to insurers.
Examine Tax Returns
Review the deceased's tax returns, searching for interest income from a policy.
Contact Financial Advisors
Accountants, lawyers, estate planners, and financial advisors hold a wealth of information about their clients. Contact them to ask if you think your loved one sought the help of someone in one of these roles.
Contact Former Employers
Contact the deceased’s former employers to find out if they offered a sponsored group policy and if your loved one made use of it.