Tips For Beneficiaries Who Can Not Locate Life Insurance Policies
The basic point of a life insurance policy is to quickly pay a beneficiary a sum of money to help them financially. Thus, you can imagine the anxiety inducing possibilities of a beneficiary not being able to locate a life insurance policy upon the insured’s passing. So, what should beneficiaries do in this situation?
If a beneficiary is able to locate the paperwork, they should first check to see whether the policy is a term or a permanent—also known as “whole life”—policy. If it’s a term policy, they’ll only receive the death benefit if the insured passed away before the term of the policy expired. If the insured had permanent insurance, the beneficiary will receive the death benefit as long as the policy remained in force, or “paid up” until the insured’s passing. However, when a permanent insurance policy lapses, most insurance companies either switch the policy to an “extended term” policy—using cash value that has accrued within the policy to pay for the policy’s premiums—or convert the policy to a “reduced paid up” policy, which keeps the policy permanently in force but lessens the death benefit based on the policy’s cash value amount.
If you’re a beneficiary who’s having trouble immediately locating a life insurance policy, there’s no need to sweat. When you locate the policy and redeem it, you’ll receive the death benefit plus the interest that’s been accruing since the date of death. If a policy lapses because the insured died, a beneficiary collects the full death benefit plus interest upon presenting a copy of the death certificate with the policy, even if the policy is redeemed years after the insured’s death.
In cases where a beneficiary cannot be located and the insurance company knows that the insured has died, the death benefit is often turned over to the state, where it is processed as unclaimed property and waits to be found. States maintain databases that list the names of beneficiaries of lost policyholders, and some states annually list the names and addresses of the beneficiaries in local newspapers. Many states have websites where you can look up a policyholder’s name to see if you are owed benefits.
While many insurance benefits go unclaimed because a beneficiary can’t be located, the most common cause of unpaid death benefits—at least in the short term—is a beneficiary’s inability to produce life insurance policy information. If you find yourself in this situation, the following are a few helpful hints for discovering lost life insurance policies: look for evidence of paid premiums, going through old checks; check old credit card statements, as the insured may have paid by credit card; and contact the deceased’s former employer to find out if he or she had group life insurance.
If someone remembered you in their life insurance policy, they wanted you to receive the benefit when they died, and it’s important that you honor their wish. If you suspect that someone listed you as a beneficiary but can’t find proof, consider contacting a company that assists with locating unclaimed property.
A life insurance policy is only as effective as its beneficiary’s ability to receive the death benefit. Unfortunately, many beneficiaries are unable to locate a life insurance policy and make a claim. If you encounter this situation, there are some tips and information that can help you get the money that you deserve. For the best life insurance quotes available, visit Insure.com.
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