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LIFE Insurance

If you're the beneficiary of a relative who just died, and you can't find their life insurance policy, don't panic. You'll still be able to claim the death benefits. Here's what to do when a life insurance policy is missing.

You lost a loved one, and now you're trying to track down a missing life insurance policy. What makes the matter worse is that you're not even sure if you're a beneficiary.

You think you're the beneficiary, but not knowing makes the stress even worse. Where do you turn?

There are avenues to take to find missing life insurance policies. Over the past decade, states have implemented laws and policies that make it easier for beneficiaries to track down missing policies and collect the money they're owed. Some states require life insurance companies to forfeit the policy proceeds to the state unclaimed property division if they don't find beneficiaries.

Let's take a look at the best ways to search for a missing policy.

Search personal papers and make contacts

Knowing the insurance company's name will point you in the right direction. If you don't have that information, there are ways to track it down.

Your first step should be to look through your relative's canceled checks or go to the person's bank and request copies of old checks. Look for checks to life insurance companies. You can also review recent income tax returns for taxable withdrawals or dividends.

If that doesn't work, check with the loved one's lawyer or accountant to see if that person can track down the insurance policy or insurance company in their records.

Check employer and group policies

Many people get life insurance through an employer. Check with the employee benefits administrations for your loved one's former employers to see if your relative bought into the company's group life insurance.

You should also reach out to your relative's former organizations, unions and professional organizations. Those groups also often provide life insurance for members.

Check with the Medical Information Bureau

Call the Medical Information Bureau (MIB). MIB maintains a database showing if insurers requested your relative's medical information. The service offers a Policy Locator Services that searches over the past 20 years and locate applications for a fee.

The only people who can use MIB is an estate representative, a surviving spouse, a child when there's no spouse or closest living relative if there is no estate representative, spouse or child.

Contact insurance companies

You can reach out to insurance companies directly to find policies. Some insurers offer lost-policy finders on their websites so you can search for your loved one's policy there.

If you conduct the search and provide basic information, the insurance company will contact you with the information if you were named a policy beneficiary. If you're not a beneficiary, the insurance company will contact you, but privacy laws restrict what the insurance company can tell you about the policy.

Check with the state

Some states will help you find lost policies. Much like searching an insurer's site, a state will request basic information to verify your loved one's policy. You may need to include the date of birth, date of death, last known address, and a copy of the death certificate.

The states that will help you with your search include:

The state may only search for policies issued in that specific state. If your loved one lived in another state previously, you may want to check with that state, too.

Another option is to check with the state's unclaimed property division if the loved one died more than a year ago. Life insurance companies forfeit life insurance proceeds to a state's unclaimed property division if they can't reach the beneficiary.

A good place to start to find unclaimed money is the National Association of Unclaimed Property Administrators, which provides links to unclaimed property divisions in each state.

Searching for a loved one's life insurance policy is easier than before, but you should also prepare yourself in case the insurance policy lapsed. This could happen if your deceased loved one stopped making payments. That's even the case if the reason the relative stopped paying is that he or she died.

If the insurance company wasn't notified of the death and still expected payment, it may stop the policy because of missed payments. Keep that in mind as you're searching for the policy.

As this page shows, it's important to talk to your loved ones about life insurance policies so you can avoid the hassle of tracking down documents. It's a good idea to talk to your loved ones to get the life insurance policy number at the very least. This will help you when the relative dies.

Losing a loved one is a life-altering event. Make it easier on yourself by talking to your relatives, so you have their financial information for when the unimaginable happens.

Naming a beneficiary

If you're making someone your beneficiary, here are a couple of things you will want to do:

  1. Be sure to provide your beneficiary with your life insurance policy details, such as policy number, insurance agent's name, company phone number and email address.
  2. Keep your records together. To make it easier on your beneficiary, be sure to keep all of your records (financial and medical) together in one place. This will help alleviate any panic or stress if your beneficiary needs to find something after you have passed.

Different kinds of policies

There are two major types of life policies. 

  • Term policy — If your relative had a term life insurance policy, and he or she died during the term and paid their premiums, the named beneficiary will receive their death benefits. If the relative or family member died outside of the term or failed to pay their premiums, you won't receive anything.
  • Permanent policy — If the policy was in force at the time of death, the named beneficiary will receive the death benefits. If the relative died a while ago, the beneficiary is entitled to the death benefits plus the interest accrued from the date of death.

Also, if your relative had a permanent life insurance policy and stopped making payments and the policy lapsed, the life insurance company could switch its status to one of the non-forfeiture options selected at purchase or specified in the policy. These options may include extended term, reduced paid-up, cash surrender value and loan value.

In most cases, laws specify that there are certain amounts that must be returned to a policyholder or beneficiary even if premiums were not fully paid.


Lapsed Policy Non-forfeiture Options

Policies include non-forfeiture options for lapsed policies, including: 

  • Extended term uses any built up cash value to buy a term life insurance policy in the amount of the current policy. If the insured dies before the term ends, the beneficiary collects the benefit. Otherwise, the beneficiary gets nothing.
  • Reduced paid-up means that the life insurance company uses the cash value of the policy to buy as much insurance as possible. This reduces the death benefits, but keeps the policy in force.
  • Cash surrender value refers to the amount of cash value a policy has. This amount is returned to the policyholder or beneficiary and the policy is canceled.
  • Loan value is the amount of the policy's cash value available as a loan. This amount will be returned to the policyholder or beneficiary and the policy will be canceled.

If the policy lapses due to the death of the insured, the beneficiary will collect the full death benefit. Also, there is no time limit on when the beneficiary can collect the death benefit. The only requirement is that the death certificate is presented to the life insurance company to verify the insured's death. If the beneficiary never comes forward, then no one receives the money.

Tracking down a missing life insurance policy can be a hassle, so it's important to tell your loved ones of any policy.