Editor’s note: This story was originally published here penny hoarder.
When a loved one dies and you know you are the beneficiary of their life insurance policy, it is usually much easier to receive the payout. You submit the claim form and a copy of the death certificate. The insurer then usually pays the claim within a few weeks.
But what if you don’t know whether your family member had a life insurance policy or not? Or what if you cannot locate the policy documents?
If no one informs the company about the death of the insured person, it is possible that the money may go unclaimed. Even if your loved one died years ago, your life insurance money may go unclaimed because there is no time limit on collecting benefits.
Wondering if you could lose life insurance money there? Keep reading to learn how to start your search.
How do life insurance companies locate beneficiaries?
Life insurance companies are not automatically notified when someone dies. They only find out that the insured person has died when the beneficiary files a claim.
If one does not inform the insurer about the death of the person, it will continue to charge the premium. Sometimes, when the premium is not paid, the company may deduct that money from the policy benefits.
However, it is becoming rare for death benefits not to be claimed. This is because under the Unclaimed Life Insurance Benefits Act, most insurers check the Social Security Administration’s master death file semiannually to locate policyholders. If their search identifies someone who has died, they must attempt to locate the beneficiary within 90 days.
Not all states have adopted the Unclaimed Life Insurance Benefits Act, but most major insurers follow its recommendations.
6 Ways to Find Lost Life Insurance Money
Whether your loved one died recently or several years ago, there are several ways to locate their life insurance policy.
Remember: There’s no time limit on claiming that money. But it is very easy to get your benefits if you file the claim on time.
If you’re not sure whether your family member or friend had life insurance, here are steps you can take.
1. Search their mails and records
If a loved one has recently died, keep an eye on their mail for correspondence from the life insurance company. You can also view policy documents where they are stored other financial documents such as tax returns.
If you have access to their bank accounts, you can search their transactions to see if they were paying life insurance premiums.
2. Contact previous employers
Group term life insurance is a common employee benefit, so when your loved one dies, you can contact their previous employers to find out if they were covered by a policy. Also, check if the person belongs to any union or professional association.
3. Use NAIC’s Life Insurance Policy Locator
If you’re not sure whether your relative or friend had life insurance, you can use the National Association of Insurance Commissioners (NAIC). Life Insurance Policy Locator Service To discover a policy. Once you have made your request, the NAIC will ask its participating insurers to search their records for a policy in the decedent’s name.
You will need the person’s legal name, Social Security number, date of birth, and date of death. If an insurer detects a policy, they will contact you if you are the beneficiary or if you are authorized to receive information about the policy.
4. Find your state’s unclaimed property website
If the life insurance company knows that the insured has died, but is unable to locate the beneficiary, they must turn over the death benefit to the state where the policy was purchased as unclaimed property.
You can search by state using the National Association of Unclaimed Property Administrators website, unclaimed.org. You can also use the tool to find other unclaimed moneyLike forgotten paychecks and old security deposits.
5. Use the search tool provided by the insurer
Many major life insurance carriers including metlife, New York Life And john hancockhave created their own search tools. By providing some personal information about your loved one, you can find out if they were covered by a policy issued by any of the companies listed above.
6. Pay a company to find you
In most cases, it will not be necessary to pay a third-party company to locate unclaimed life insurance money. But if you think a policy exists and you can’t locate it, it may be worth paying a fee for a search service.
Typically, these companies offer one of two services: They will send emails, letters, and faxes to life insurance companies on your behalf. Or they will do an investigative search and charge you a percentage of any money recovered.
What to do if you have life insurance?
The purpose of buying life insurance is to provide financial protection to the people you love, so the idea of your policy somehow getting lost sounds like a nightmare. The good news is that it can be easily avoided.
The most obvious thing you can do is tell the person you have named as the beneficiary about the policy. Tell them the name of the company and where you keep the policy documents. This way, if you die during the cover period they can submit a claim immediately.
It is also important to name a contingent beneficiary who will receive the death benefit if the primary beneficiary dies before you. If the primary beneficiary has died and there are no contingent beneficiaries, the death benefit will become part of your estate and go through probate, which is often lengthy.
Finally, make sure you review beneficiary designations at least once a year and after any major life event, for example, the birth of a child, marriage, divorce or death of a loved one.
Fortunately, regulations and modern technology have made it harder to lose life insurance benefits. But you can play your part in ensuring that your death benefit is distributed as quickly as possible by letting your beneficiaries know about your policy and where they can find it.
