Unclaimed Life Insurance - Life Insurance Benefits You Didn’t Know About

Unclaimed life insurance policies do not disappear, they remain in force, waiting for the beneficiary to collect on them. Do you think that you may have such benefits waiting for you? Initiating an unclaimed life insurance search is a relatively straightforward process, but first it is important to understand what happens to a life insurance when someone dies.

What are the insurance terms, whole life or term life? If the insurance was term, then any unclaimed policy must be collected before the end of the term. If the death occurred after the end of the term policy, there will be no unclaimed life insurance to collect. If the policy was a ‘whole,’ there are several things that can happen. If the policy holder made premium payments up to the time that he/she passed away, the policy is paid up and the death benefit will be paid in full. If the policy holder stopped making payments, allowing the policy to lapse, there are two options available to the insurance company. They can assign the policy extended term status.

Extended status means they use the cash value of the life insurance policy to buy a term-life policy. The policy will be for the same amount as the original whole-life-policy. The term will extend for the amount of time that the cash value will allow. The insurer can also place the policy in what is known as reduced, paid up status. This means that the policy remains in effect, but the amount of the death benefit is reduced. Either of these options makes it possible to collect unclaimed life insurance.

What happens if no one notifies the company of the death? The insurer will contact the policy holder by mail to determine why payments have stopped, but, unfortunately, if no one notifies the policy issuing company that the policy holder is deceased, the policy will lapse.

How do you find unclaimed life insurance?

What should you do if you believe that you or someone in your family may have unclaimed life benefits? An unclaimed life insurance search is a straightforward task, but does require patience.

1. Check with the state where the insured lived. Sometimes life-policies not claimed are turned over to the unclaimed property division of the state.

2. Check the financial records of the deceased. Look for canceled checks or through a check register for the name of the issuing company, and then give them a call.

3. Check incoming mail. Some companies will make repeated attempts to notify a policy holder who does not make a payment.

4. Check with the deceased’s past employers. Often life-insurance is offered through a company policy.

If all else fails, contact the Medical Information Bureau. They have a database that goes back over a decade and reports medical information inquiries. Life-insurance-companies typically request medical information when they write new policies. This information, while not free, will provide you with the name of any company that inquired about the deceased medical records.