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Leaving money on the table: Do you have an unclaimed life insurance payout? Here’s how to track it down.

By Rachel Sommer ^. March 22, 2021

Each year, billions of dollars in life insurance benefits go unclaimed. In fact, the Florida Office of Insurance Regulation reported $7.4 billion in unclaimed benefits in 2016. This happens because beneficiaries can’t find their deceased loved ones’ policies, or in some cases may not even know the policies exist. Many people are entitled to unclaimed life insurance money, or the “death benefit,” without even knowing it. Unclaimed life insurance policies can happen for a few reasons.

The most common reason why life insurance policies go unclaimed is that the beneficiary listed on the policy is completely unaware they are named on the policy. Also, some life insurance policy holders name a beneficiary but either leave the contact information incomplete or do not provide any contact information, which means the insurance company can’t track down the beneficiary.

Another reason why life insurance policies don’t get claimed is that the insurance company isn’t made aware the policy holder passed away in the first place. Typically, the beneficiary is responsible for notifying the company of the policyholder’s passing, which initiates the claim process of receiving the death benefit. Communicating with family members about their life insurance and putting a comprehensive plan in place ahead of time is the best way to avoid lost policies for your next of kin. Easeenet makes it easy to securely store your login credentials for your life insurance policy, as well as any relevant policy documents, and seamlessly transfer everything to your next of kin.

What is the death benefit?

The death benefit, or life insurance payout, is the amount of money you receive from someone’s life insurance policy. It is tax free and can be used however you like. If a death benefit is not claimed by the beneficiary, the insurance provider is obligated to turn the it over to the state in which the policy was purchased as “unclaimed property.”

How to locate unclaimed life insurance policies

When purchasing a life insurance policy, you’re legally required to name a beneficiary. However, some people put incomplete or incorrect information. If you’re the beneficiary for someone’s life insurance policy and that person has passed away, the insurance company may be trying to notify you so it can give you the funds. If you are certain there is a claim, contact the insurance provider directly as your first course of action.

There’s no database for unclaimed life insurance which makes searching for a policy often difficult. However, don’t fret there are a number of ways to track down an unclaimed life insurance policy.

Check through files & physical documents first

First, look through the person’s insurance documents and see if you can find anything about a life insurance policy. You should check desk drawers, a safety box or file cabinet. If you can’t find any information about a life insurance policy, call the deceased’s home or auto insurance company and see if there is any information on file. With Easeenet, you can securely store all of these files easily in a folder of your choosing, and your next of kin can access the information they need from any device, anywhere.

Check bank statements

See if any checks or automated payments have been made out to life insurance companies over the years.

Contact financial advisors

Present or prior attorneys, accountants, investment advisors, bankers, business insurance agents/brokers and other financial professionals might have information about the deceased’s life insurance policies.

Contact previous employers

The deceased person may have had group life insurance through a past employer. Former employers maintain records of past group policies.

Check the mail

For the year following the death of the policyholder, look for premium notices or dividend notices. If a policy has been paid up, there will be no payment notices due; however, the company may still send an annual notice regarding the status of the policy or notice of a dividend.

Review income tax returns

Life insurance companies pay interest on accumulations on permanent policies and charge interest on policy loans. Look over the deceased’s tax returns from the past two years to see if there is interest income from and interest expenses paid to life insurance companies.

Contact state insurance departments

There are numerous free search services for residents looking for lost policies. The National Association of Insurance Commissioners (NAIC) has an online tool called the “Life Insurance Company Location System” to help you find state insurance department officials who can help to identify companies that might have written life insurance on the deceased.

Check with the state’s Unclaimed Property Office

If a life insurance company knows that an insured client has died but can’t find the beneficiary, they are obligated to turn the death benefit over to the state in which the policy was purchased as “unclaimed property.” If you know where the policy was bought, you can contact the National Association of Unclaimed Property Administrators to see if it has any unclaimed money from life insurance policies belonging to the deceased.

Search the MIB database

There is no central database of policy documents, but there is a database of all applications for individual life insurance processed since January 1, 1996. As a disclaimer, there is a fee for each search and many searches are not successful.

How to prevent losing a life insurance policy

In a scenario like this, prevention is key to protect your next of kin from added stress and struggle during their grieving period. If you have a life insurance policy, make sure your beneficiaries know about it. Keep relevant details in a safe place, like your insurance company’s name and your policy number, so it’s easily accessible. Easeenet makes it effortless to keep your login credentials up to date so your next of kin can log in directly to access what they need, and has secure, customizable folders to keep your documents safe and organized for your next of kin. If you’re not storing your login credentials with Easeenet, make sure to keep your records updated manually! Every year, review your policy documents to ensure that your beneficiaries are up to date, and their contact information is accurate.

What to do if the insurance company changes

Occasionally insurance companies change names or merge with another provider. If you find unclaimed life insurance and the company no longer exists, don’t fret, you can still get in contact with the company. Get in touch with your state commissioner’s office and explain the situation. It can help you figure out who to contact about the life insurance policy and how to file a claim with the new company.Searching for an unclaimed life insurance policy isn’t easy, but it is possible. Following the steps outlined above is the best way to find a lost policy. For the future, make sure you and your family members communicate about life insurance coverage to ensure future policies don’t get lost. Using an online organization tool like Easeenet is a great way to keep track of login information and documents. With Easeenet, you can also designate a legacy contact so they get seamless access when they need it, from any device, anywhere. Get started today with our free trial.