Life Insurance: Age-Old Protection For Peace Of Mind

Life insurance is a financial product that provides financial protection for your loved ones in the event of your death. The cost of life insurance, or the 'premium', is primarily influenced by age, with older individuals paying higher premiums than younger people. This is because the likelihood of death increases with age, and life insurance premiums reflect the probability of a payout. In addition to age, other factors such as health, gender, lifestyle choices, and the type of policy also impact the cost of life insurance. It is generally recommended to purchase life insurance at a younger age to take advantage of lower premiums and avoid potential health complications that may arise with advancing age.

Locating a lost life insurance policy

Search Personal Records and Documents

Start by searching through the deceased person's personal records and documents. This includes both paper and digital files, bank statements, safe deposit boxes, and other storage spaces. Look for insurance-related documents, such as policy applications, premium notices, dividend notices, or annual policy status updates. Remember that once you know the name of the insurance company, you can contact them directly for assistance.

Consult Financial Advisors and Other Professionals

Frequently, a trusted financial advisor, insurance agent, accountant, personal lawyer, spiritual advisor, or even friends may have knowledge of your loved one's insurance policy. These individuals can provide valuable insights and guidance on locating the missing policy.

Check with Automotive and Home Insurers

Often, individuals purchase multiple types of insurance from the same company. If you can find documentation of your loved one's car or home insurance, contact those companies to inquire about any life insurance policies they may have had with them.

Contact Past Employers and Associations

Many employers offer group life insurance to their employees. Check with your loved one's former employer(s) to see if they had a group life insurance policy or if they have any information about it. Additionally, contact any trade unions, veterans' associations, alumni associations, or other professional or social organizations they belonged to, as they may have offered group life insurance to their members.

Utilize Online Databases and Tools

Several online databases and tools can assist you in your search:

• MIB Underwriting Group database: This database contains records of life insurance applications, which may indicate the existence of an active policy.
• NAIC Life Insurance Policy Locator: The National Association of Insurance Commissioners (NAIC) offers a free online tool called the Life Insurance Policy Locator. This service allows you to submit a request for participating life insurance companies to search their records for your loved one's information. You will need to provide information from the death certificate, including the Social Security number, legal name, date of birth, date of death, and relationship to the deceased.
• National Association of Unclaimed Property Administrators (NAUPA): NAUPA runs MissingMoney.com, a listing of life insurance benefits that were turned over to state governments due to unclaimed status. You can search this database to see if your loved one's policy benefits are listed.

Contact State Departments and Offices

Get in touch with your state insurance commissioner's office and the state department of unclaimed property. Some states offer online databases specifically for searching for life insurance policies. Additionally, life insurance companies are required to report and deliver unclaimed property to the state after a certain period of inactivity, usually three years or more. You can contact the State Controller's Office or refer to the National Association of Unclaimed Property Administrators' website to find your state's specific information.

Check Public Records

Life insurance policies may be listed in public records, such as your loved one's will or divorce proceedings, where it may be listed as an asset.

Remember, even if you don't have the physical policy document, you can still make a claim. Focus on gathering as much information as possible, such as the company name, policy number, and any other relevant details. This information can be enough to initiate the claims process.

What to do if you can't find the policy

If you can't find a life insurance policy for a deceased loved one, there are several steps you can take to try and locate it. Here are some detailed instructions to guide your search:

Search their documents and correspondence:

Look through the deceased's paper and digital files, including mail and email, for any insurance-related documents or correspondence. Check for bank statements showing payments to insurance companies, dividend notices, or annual notices regarding the policy status. Review their tax returns for records of interest income or expenses paid to insurance companies.

Contact relevant people:

Speak to the deceased's banker, financial adviser, attorney, accountant, or insurance agent. They may have information about existing life insurance policies. Contact the deceased's former employers, as some companies offer group life insurance as an employee benefit, which may also extend to spouses or dependents.

Use online tools:

Submit a request to the National Association of Insurance Commissioners' (NAIC) Life Insurance Policy Locator Service. This free online tool will ask participating companies to search their records for a life insurance policy in the name of the deceased. You will need information such as the social security number, legal name, date of birth, and date of death.

Check for unclaimed property:

When an insured client dies, and the beneficiary cannot be found, the insurance company must turn the death benefit over to the state where the policy was purchased as "unclaimed property." You can search the National Association of Unclaimed Property Administrators' database or your state's unclaimed property office to see if any unclaimed benefits have been turned over to the state.

Be aware of special challenges:

Keep in mind that insurance companies may change their names, merge with others, or sell policies to different companies. The NAIC provides tips on how to find these companies. If the company has gone bankrupt, contact your state's life and health guaranty association.

Consider fee-based services:

If all else fails, you can engage fee-based services to assist in your search. MIB, an insurance membership corporation, offers services for a fee to find evidence of life insurance applications. Several private companies also provide similar services for a fee.

How to file a claim for life insurance benefits

The death of a loved one is a difficult time, and the last thing you want to worry about is figuring out how to file a life insurance claim. Here's a step-by-step guide to help you through the process:

Step 1: Identify the Insurance Company and Policy

Locate the insurance policy documents, which should include the name of the insurance company in big letters. If you cannot find the policy, you can try contacting the agent who sold the policy or your loved one's financial advisor for assistance.

Step 2: Obtain Certified Copies of the Death Certificate

Get multiple certified copies (at least 10 is recommended) of the death certificate from the relevant local government agency, such as the local vital records office or the funeral home. Life insurance companies require these to verify the policyholder's passing, and you will also need them for various administrative tasks, such as cancelling subscriptions and closing accounts.

Step 3: Contact the Insurance Company and Obtain Claim Forms

Reach out to the insurance company to inform them of the policyholder's death and your intention to file a claim. They will guide you through their specific process and provide you with the necessary claim forms. Many companies make these forms available online, or they may ask you to request them by mail or phone.

Step 4: Complete and Submit the Claim Forms

Fill out the claim forms as thoroughly and accurately as possible. Triple-check your answers to avoid any delays in the process. Along with the completed forms, you will need to submit the policy number (located on the policy documents) and the certified death certificate. Some companies may also require additional supporting documents, such as a copy of the autopsy, toxicology, or police report if the death was due to an accident.

Step 5: Choose Your Preferred Payout Method

Insurers typically offer several options for receiving the death benefit payout:

• Lump sum: Receive the full amount in one payment.
• Life income annuity: Receive fixed, regular payments for life, calculated based on your life expectancy.
• Specific income annuity: Receive payments over a fixed period, such as 10 years.
• Retained asset account: Keep the death benefit in an interest-bearing savings account with the insurer, and withdraw as needed.

Each of these methods may have different tax implications, so consider consulting a tax professional for guidance.

Step 6: Wait for the Payout

Insurers usually pay out life insurance claims within days or weeks of receiving the paperwork. However, there may be cases where the payout is delayed, such as if the person died within the "contestability period" (usually the first two years of the policy). If there are multiple beneficiaries, each will typically need to submit their own claim and will be paid separately.

Additional Notes:

• Filing a claim promptly and accurately will help expedite the process and provide financial security during this difficult time.
• If your claim is denied, you have the right to know the reason and to file an appeal. You can also contact your state's department of insurance for assistance.
• If the deceased had group or supplemental life insurance through their workplace, the benefits department will likely contact the beneficiaries directly.
• Spouses, former spouses, and minor or disabled children of the deceased may also be entitled to Social Security survivor benefits.

What happens to unclaimed life insurance money?

Life insurance is often used to leave an inheritance for loved ones, but it's not uncommon for policies to go unclaimed. This can happen when a policyholder passes away and the named beneficiary doesn't claim their payout or death benefit. This may be because the beneficiary forgets to file a claim, is unaware they're a beneficiary, or becomes estranged from the policyholder. It might also be the result of inaccurate or incomplete information that makes it difficult for the insurer to track down the beneficiary.

If you suspect that a deceased loved one had a life insurance policy, there are several ways to find out if there is unclaimed money or property. You can start by searching through their paperwork, including old tax returns and bank statements. You can also check their mail and email for premium or dividend notices, or review their recent tax returns for records of interest income or expenses paid to life insurance companies.

If you know the name of the insurance company, you can contact them directly to find out if you were named as a beneficiary and file a claim. There are also free online tools, such as the National Association of Insurance Commissioners' (NAIC) Life Insurance Policy Locator Service, which can help you locate a policy. The NAIC will ask participating companies to search their records to determine whether they have a life insurance policy in the name of the deceased. If they do, the company will respond to you if you are the designated beneficiary or are authorized to receive the information.

If you are unable to locate a policy or file a claim, the unclaimed insurance money will eventually be passed on to the state insurance department or the state treasury. Each state has unique laws that dictate what happens to unclaimed life insurance payouts, but in many cases, the proceeds of the policy plus any interest earned will be sent to the policyholder's state after a certain number of years. You can then contact state officials to collect your unclaimed payout. It's a good idea to familiarize yourself with the unclaimed property laws in your state.

What to do with an old life insurance policy

If you have an old life insurance policy, there are a few things you can do to ensure it doesn't get lost and that your family can access it if needed. Keeping updated copies of your life insurance documents in a secure place, such as a safe or as digital copies on your computer, is a good first step. It's also a good idea to talk to your beneficiaries about the policy and the process they'll need to follow if the worst should happen. Make sure they understand the timeframe they have to report your death to the insurance company to avoid issues that could lead to the policy becoming inactive or unclaimed. Finally, it's recommended that you send copies at least once a year to beneficiaries that are included in the policy. Having details like the policy number, face value, and cash value will help to expedite the payout process, rather than your loved ones having to search for all of this information upon your death.

If you believe you or a loved one has an old life insurance policy but don't know the details, there are several ways to find it:

• Contact the financial advisor of the presumed policyholder. They should have records of any active life insurance policies.
• Review financial records, including paperwork and bank statements, to see if an insurer is mentioned. Life insurance premiums are often paid annually, so there should be a charge with the insurer's name, though you may need to check several years of statements.
• Contact the employer. Many people get life insurance through their work, so get in touch with the policyholder's current or former employer to see if the person has any coverage through a group policy.
• Use the NAIC Policy Locator. The National Association of Insurance Commissioners (NAIC) offers a free life insurance policy locator to look for an old life insurance policy. You will need the relative's date of birth, date of death, legal name, and Social Security number.
• Conduct a search through the National Association of Unclaimed Property Administrators (NAUPA). This allows you to select your state or province and go to the appropriate website so you can search for unclaimed property, including old life insurance policies.
• Contact the state insurance department. If a beneficiary doesn't file a claim after a policyholder passes away, the policy goes to the state insurance department. You can contact them to see if they're holding a policy for your loved one.

If you've found an old life insurance policy and are wondering if it's still valid, the first step is to contact the insurer to find out if the policy is active or inactive and its death benefit, cash value, and cash surrender value, if applicable. You can also contact a life settlement company to see how much your policy is worth if you choose to sell it.

Frequently asked questions