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How to find and claim life insurance you may be owed

There are billions of dollars in unclaimed life insurance floating around the US.

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Rhys Subitch
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There were over $7.4 billion in unclaimed life insurance payouts in 2016, according to a report by USA Today. If you suspect you may be a beneficiary, there are a few ways to find out if you’re owed a payout — and state insurance departments and national insurance associations can be a huge help.

How can I locate an unclaimed life insurance policy?

As for how to find a life insurance policy, your first step should be to check any records the person may have kept, like financial statements.

If that doesn’t work, here’s how to find the deceased person’s life insurance policy:

  • Search the National Association of Insurance Commissioners (NAIC) database. The NAIC has a life insurance policy locator service, so head to the site and follow the prompts.
  • Contact your state insurance department. They’ll likely have resources for looking up unclaimed life insurance, especially if it’s already been turned over to the state.

What happens to the death benefit if nobody claims it?

Life insurance companies can’t keep unclaimed death benefits forever, and the state laws on unclaimed property vary. Generally, insurers must turn over the proceeds to the state in which the policyholder resided after a certain number of years have passed.

How to claim a life insurance payout

Once you’ve found an unpaid benefit, it’s up to you to begin the claims process. These are the steps:

  1. Obtain a certified copy of the policyholder’s death certificate. The funeral home or your state or county’s records department will be able to help with that.
  2. Gather any relevant documentation. Whether it’s from the NAIC, the state or the individual’s personal records, make sure you have all the information about the policy gathered in one place.
  3. Contact the insurer. Request and complete the claims form, and submit any supporting documents. If too much time has passed, the insurer may have turned the policy over to the state.
  4. Start the unclaimed property process. If you find out the policy has been turned over to the state, go to your state’s unclaimed property website and see if there are any instructions there. Otherwise, you may need to go to the state’s insurance department directly.

Do life insurance companies ever notify beneficiaries?

Life insurance companies have no legal obligation to let beneficiaries know when they’re owed a payout.

However, most insurers use tracking technologies — like the Social Security Administration’s Death Master File — to confirm whether a policyholder has died, according to the Insurance Information Institute. They may then search for beneficiaries.

But if you think you’re owed a death benefit, it’ll probably be quicker for you to initiate the claim yourself.

Why is there so much unclaimed life insurance money?

It’s possible to be a beneficiary and not know it. Some individuals take out life insurance through an employer plan and don’t notify those who they list as beneficiaries, and others simply choose not to tell.

The NAIC is working on legislation that would require insurers to check if any policyholders have passed away and left benefits unclaimed. But for now, it’s usually up to the beneficiary to file a claim. Be sure to carefully investigate records and check for unclaimed property rather than assuming someone will contact you about it.

What is the limiting age?

Most permanent life insurance policies have a “limiting age” of 121. At this point, it’s up to the policyholder to claim their cash value. After three years, if the insurer hasn’t had any contact with the policyholder and there’s been no claim, most states require insurers to turn over the policy’s proceeds as unclaimed property.

How long does a life insurance claim take?

State laws vary, but typically insurers get 30 days to review a claim. Check that you have all the necessary requested documentation when you file to reduce the time it takes.

If the funds have already gone to the state, it’ll also be different by location. For example, it can take six to eight weeks to process a claim in Alabama, whereas Washington state has a typical turnaround time of 30 days.

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Bottom line

Insurance companies aren’t likely to reach out when death benefits go unclaimed, so it’s up to you to find out if your loved one had a policy. Once you’ve looked through any records left behind, you can work with the NAIC or your state’s department of insurance to confirm whether you’re owed a payout.

When you’re doing your own estate planning, carefully compare your life insurance options and inform your beneficiaries once you’ve signed off a policy.

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