Many people die without letting their relatives know about life insurance policies. If the policies were created before the companies had electronic records, there may seem to be no way for surviving family members to find them if no papers were left behind. In a Consumer Reports study, the average lost benefit was about $2,000. There is about $1 billion in lost claims today. Although life insurance companies make efforts to find beneficiaries when they learn about the death of a policyholder, individual state agencies want them to work harder to find beneficiaries. To do this, many states require insurance companies to collect Social Security data, check data frequently and take steps to notify beneficiaries after learning about the death of a policyholder.
Tracking Down Life Insurance Policies
Anyone who may be a beneficiary of a life insurance policy that is now payable should be prepared to do some work to find out. They should also be prepared to prove their identity. To track down a payable policy, have the decedent’s name and Social Security number available. Former addresses are also helpful. Use the following steps to find a policy:
- Search through the decedent’s paperwork for policy copies or statements.
- Check the decedent’s safety deposit boxes or stored files.
- If an insurance company is listed, search for it independently.
- Search for policies in all states where the decedent may have lived.
- If the insurance company no longer exists, contact the state insurance commissioner about the policy.
- Check with an insurance rating service about any defunct insurance companies.
- Look for communication between the decedent and any insurance agents even if they handle other types of insurance.
- Check with the decedent’s former employers to see if he or she had any work-provided policies that are still viable.
- Search unclaimed property files for every state where the decedent may have lived.
- Search for a state-based missing policy locator tool, and use one for every state where the decedent may have lived.
These are the best starting places for finding a policy. When searching, use the name of the beneficiary if the policyholder’s name does not bring up any results. Also, be aware that some companies may make spelling mistakes in names. If the decedent had a complicated last name, try common misspellings as well. This is especially important if the policy is very old. When these steps do not bring any results, the final step to take is to pay for a search in the MIB database. Since the fee is upward of $70, this should be a last resort for people who are sure that a policy exists but have been unable to locate it.
Anyone who goes through the process of tracking down a lost life insurance policy learns the valuable lesson that it is important to communicate with family members. The takeaway lesson is to let beneficiaries know that they are included in a policy immediately. Also, tell them who provides the policy and how to get in touch with the company. Past generations were known for being more secretive about making plans for covering final expenses and not understanding the implications of keeping their life insurance policies secret. Today, the importance of communication is evident thanks to the Internet. To learn more about setting up a policy, communicating with beneficiaries or tracking down a lost policy, discuss concerns with an agent.