The Insurance Information Institute reminded Americans during Insurance Awareness Month to keep clean policy records and to know where they are located. When people die, it is not uncommon for their life insurance benefits to remain unclaimed because of beneficiaries not knowing about the existence of a policy. If dependents are left to struggle financially, this is especially an unfortunate event. Experts at the III said that many surviving family members talk about the possible existence of a life insurance policy after a person dies. However, they pointed out that people should not have to speculate and should instead be made aware of the policy’s existence beforehand.
It is especially important to tell beneficiaries that they are named. In most cases, policyholders avoid telling people because of the grim nature of the subject. They also avoid it and assume that the life insurance company will somehow notify the beneficiary or beneficiaries after the policyholder’s death even if those people have moved. Fortunately, there are several solutions for tracking down a life insurance policy. Start by following these five useful steps.
1. Search for insurance documents. Look through paper files and financial folders. The policy may be located in a bank safety deposit box or in a home safe. Look for insurance agents’ cards, and call any agencies found that are listed on the cards. Check an address book to see if there is any contact information for a life insurance agent.
2. Check financial records. Look through bank statements, receipts and copies of checks to see if any payments were made to a life insurance company. Accounting or other financial ledgers may also include this information.
3. Contact the decedent’s employer. If the decedent was employed or had recently quit a job at the time of death, contact his or her previous employer. Many companies offer minimal life insurance policies that are enough to cover funeral expenses. They usually offer additional voluntary coverage. It is also possible that the decedent converted the policy into a permanent one if the job ended.
4. Contact the unclaimed property office. Every state has a department for unclaimed property. If a life insurance company is aware of the death of a policyholder and cannot contact the beneficiary, the policy is reported to the unclaimed property office in most cases. The funds are submitted to the unclaimed property office in the state where the policy was purchased. If a decedent moved several times over the years, it may be necessary to contact the offices of each state where he or she resided in the past.
5. Check the MIB database. The MIB Group is a not-for-profit company made up of life and health insurance affiliates. They keep a database of all policies made in 1996 or after by companies that are members of the MIB Group. Since there is a fee of $75 to search the records, this should be saved as a last resort after having no luck with the previous four steps.
Life insurance companies may try to contact beneficiaries of policies. However, some people may not answer their phone if they see an odd number. They may forget to check their voicemail or may have a full inbox to prevent receiving important messages. Some people move and completely change their contact information or surnames, which often makes them unreachable for insurance companies. Experts emphasize the importance of telling several close friends and family members about an existing policy. Keep records of the policy, its benefits and records of recent payments made in a location where survivors can access them. To learn more about options, discuss concerns with an agent.