How to Locate Unclaimed Insurance Policy Benefits

The tragedy of death is often made worse when the beneficiaries of a life insurance policy do not know about the policy and never get the benefits. According to The Wall Street Journal, the National Association of Unclaimed Property Administrators says that state treasurers in the United States are holding about $32.9 billion in unclaimed bank accounts and other assets, including life insurance payouts.

The insurance companies may or may not do a search for beneficiaries of a life insurance policy. If they do not, it will take years before they must hand the money over to the state government, which will put the information in a state government unclaimed property database. The money will sit there for several years until the state claims the money. At that point, the state and the insurance companies will have  gained years of earned interest, and the principal is lost forever.

In order to prevent this kind of insurance tragedy, The Wall Street Journal article describes “The 25 Documents You Need Before You Die”. It is worth a read. But in many cases, the deceased either lost track of old policies or did not tell the right people about them.

The New York Times discusses fee based services that charge a one time fee of between $115 and $145 to store the policy information and to contact the beneficiaries. But with any of these services, it is best to check carefully and periodically to ensure that the firm is still legitimate and viable.

It is an important first step for the next of kin or responsible party to go through each and every major document that the deceased had in possession, and to look specifically for anything that refers to an insurance policy. It is easy to contact the insurance company and to ask if a policy existed and has a payout to the beneficiary.

With mature individuals and the elderly, it is very important to pay attention to anecdotal evidence and statements about old policies or policies that were only mentioned in passing. Many times, people stopped paying premiums but were unaware that the policy may still have allowed a partial or full payout.

If the deceased or their beneficiaries had unknown insurance payouts, each state of residence can be checked and unclaimed funds can be located. Missing Money is a free search program for participating states. It is easy to check state by state to see if there is unclaimed property of any type in state government unclaimed property accounts.

Unclaimed property could be of any type that must be handed over to the state government when it is not claimed, not just life insurance payouts. There might be old bank deposits, utility refunds and other types of property.

As a warning, be very careful when clicking on search results for “unclaimed money”, because some sites that promise help in finding unclaimed money will definitely be scams or hack sites. 

The FDIC also has an unclaimed funds database for failed institutions that collected different types of deposits or owed dividends.

After the initial checks of every state of past residence, it is a good policy to keep checking the unclaimed funds databases on a semiannual or annual basis. This is because it can take years for funds to get into the state accounts, and more unclaimed funds might be found.