Every year it is estimated that hundreds of millions of dollars go to waste from unclaimed life insurance policies. In fact, there are no reliable statistics but it is estimated that there are billions of dollars in unclaimed insurance policies just waiting for the beneficiaries to show up. But what exactly happens to the money which was supposed to go to the beneficiaries, but instead just goes unclaimed?
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In order to find unclaimed life insurance policies, it will be important to understand just what they are and what is needed to file the proper claim.
What is an Unclaimed Life Insurance Policy?
Basically, this is a life insurance policy in which the beneficiary cannot be found by the insurance company. When the insurance company has been notified that a policy holder has passed away, they are required to contact the beneficiary.
However, with many insurance companies the policies put into place in finding the beneficiary are not always carried out to their fullest extent. In fact, so bad have certain insurance companies such as MetLife and Prudential in trying to contact beneficiaries that they have actually signed agreements with state authorities which include paying penalties as an incentive to do a better job of tracking them down.
If after a certain period of time the beneficiary cannot be found, the unclaimed money will then go to the state. However, the money can still claimed even if many years have passed from the state if the proper applications are made.
How to Search for a Lost Policy?
For those who believe that they are beneficiaries to unclaimed life insurance benefits then there are steps that you can take which will help discover and claim what you are owed.
Check Files: If you are going through the papers of someone who has passed way, you’ll want to look for any letters or communication with a life insurance company. In addition, you will want to look for any checks written to an insurance company even if they are very old. Even forgotten life insurance policies are usually still in force decades after the policy holder has passed away as long as all the premiums have been paid.
Check Mail: If the payments were still being made on the policy itself, then there should be bills in the mail. You’ll either receive a premium payment bill or if the premiums have all been paid, a statement on the value of the missing life insurance policy itself.
Tax Returns: For an unclaimed life insurance policy, some may have paid interest of which you’ll find evidence in their tax files.
Check Work, Unions and other Employers: Quite often in the search unclaimed life insurance policy, there might be one offered by the place where they worked. You should start your search by calling the company itself and asking if there was a policy in place. If the company has merged or is difficult to find, ask the state insurance department as they can provide some assistance.
You may have to use a policy locator service to find an unclaimed life insurance policy which will usually cost a fee. If it has been a year or more since the policy holder died, then you should go the state agency in charge of unclaimed property. They are the ones to call for a lost life insurance policy as they hold the benefits after a year or more. You may also find that there is an unclaimed life insurance database available online that you can access and see if your relative does have such a policy.
What if the Policy Has Lapsed?
If your unclaimed life insurance policyholder search has revealed that the policy itself has lapsed due to non-payment of premiums, then you will need to contact the insurance company to see what can be done to rectify the situation, if any.
If the policy has only recently lapsed within the past month or so, then it may be possible to pay the premiums and claim the benefits depending on the rules and regulations that the life insurance company has in place. However, if the policy has lapsed for a long period of time and no notification of death was received by the company, then it is entirely possible that the policy is no longer in force and thus no benefits available.
It will naturally depend on the relation between the last payment on the policy and the day that the policy holder passed away. The insurance company not being informed of the death of the policy holder can happen particularly if the death occurred in another state.
How to Claim a Missing Life Insurance Policy?
If you discover in your search that you are the beneficiary of a misplaced life insurance policy, then you can claim the money if you follow the proper steps.
Policy Number: You will need to have the proper policy number to show that this does apply to you. Even a long lost life insurance policy will have the number and basic information that is needed so that you can make a claim.
Provide Identification: If the insurance company still holds the policy or if it now belongs to the state, you will simply need to present yourself with the proper identification to prove that you are the beneficiary. While each company and state agency has its particular requirements, in most cases you will need one or two forms of identification such as your driver’s license and your birth certificate or other form of recognized ID.
In addition, it is possible that you may need to show proof of your relation in order to claim the benefits. This is especially true if you have a common name so that there is no basis for fraud. A birth certificate helps as the names of your parents will be listed as well. The insurance company or the state will have the exact guidelines when it comes to proper identification of unclaimed life insurance benefits.
With so many unclaimed life insurance policies, it does pay to check if a loved one passes away to see if you are the beneficiary of such a policy.