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When a loved one dies, sorting through everything they left behind can seem overwhelming. And while dealing with paperwork while you're grieving is the last thing you want to do, life insurance benefits can be crucial for covering funeral costs, settling the person's debts or helping surviving family members pay their bills.
What if you don't know whether your loved one had life insurance or you can't locate their policy? To find a loved one's lost insurance policy, you can search their records, contact their financial advisors or check their safe deposit box. Read on for other ways to find a missing life insurance policy.
Will a Life Insurance Company Contact You?
Even if you're listed as the beneficiary on a life insurance policy, the insurance carrier won't automatically contact you. Insurance carriers generally don't know of a policyholder's death until someone tells them or until they check the Death Master File maintained by the Social Security Administration (SSA). The Unclaimed Life Insurance Benefits Act requires most insurance carriers to check this file at least semi-annually, looking for policyholders whose death benefits haven't been claimed. If they find a match, they must make a good faith effort to find the beneficiary within 90 days.
The Unclaimed Life Insurance Benefits Act does not apply in every state, but most big insurance carriers comply with its recommendations. Even so, the SSA's Death Master File doesn't include every deceased person, only those who had their death reported to the SSA.
Survivors often need life insurance benefits long before the insurance company checks the SSA's file. To locate a lost life insurance policy, here are 10 things you can do.
1. Search Their Files
Look through your loved one's paper and computer files for the life insurance policy. You may find a copy of an application for life insurance, which can also help: In addition to indicating a possible insurance policy, the application will include a list of any other life insurance policies they had at the time they submitted their application.
2. Search Online
- Use the Life Insurance Policy Locator Service, a free tool from the National Association of Insurance Commissioners. When you submit a request using this tool, participating insurance carriers are asked to search for policies.
- Use your state insurance department's policy finder, which will direct your inquiry to all participating life insurance companies that sell policies within that state.
- If your state doesn't have an online policy finder, contact your state's insurance department for help locating the policy.
3. Ask Their Financial Advisors
Your loved one's financial planner, accountant, attorney or insurance agent may know of existing life insurance policies.
4. Contact Their Home or Auto Insurance Company
People often bundle multiple types of insurance, such as buying homeowners insurance and life insurance from the same company. Contact the claims or customer service department of the company where your loved one had home or auto insurance to see if there is also a life insurance policy.
5. Contact Their Current and Former Employers
Many employers offer group term life insurance as an employee benefit. Some companies even offer this insurance to spouses or dependents. Check with past and current employers of your loved one, their surviving spouse and their children for life insurance policies through their company.
6. Look Through Their Bank Records
Bank statements or checks showing payments to insurance companies could help you track down a life insurance policy. You may need to contact bank officials to access their records and provide proof that you are entitled to this information.
7. Check Their Safe Deposit Box
If you have the key to your loved one's safe deposit box, ask the bank how to gain access. You'll likely have to provide documents proving your kinship. If you're not sure whether they had a safe deposit box, you can contact the bank where they had their accounts, look through canceled checks or bank records for payments to a bank, or watch their mail for notices requesting payment for the box.
8. Contact Organizations to Which Your Loved One Belonged
Contact professional associations, labor unions, fraternal organizations, credit unions and other groups that your loved one belonged to. Like employers, organizations often offer group term life insurance for members.
9. Review Their Tax Returns
Income tax returns may show interest income from a permanent life insurance policy with cash value. If your family member borrowed against a life insurance policy, the returns should show any interest paid on the loan.
10. Watch Their Mail and Email
Life insurance companies often send bills, statements, dividend notices and other updates. Monitor the person's mail and email for at least a year for this type of letter. Have physical mail redirected to your address or a P.O. box to prevent it from falling into the hands of identity thieves.
What if You Still Can't Find the Life Insurance Policy?
If an insurance payout goes unclaimed long enough, the policy may end up as unclaimed property. This generally takes about three years, but this varies depending on the state. If a few years have passed and you haven't found a life insurance policy, you can use The National Association of Unclaimed Property Administrators' free search tool or MissingMoney.com to search for unclaimed property.
Once you find your relative's life insurance policy, you or other beneficiaries will have different options for how to receive the death benefit. Getting advice from a financial planner can help you make smart decisions during an emotional time. Used wisely, the proceeds of a life insurance policy can help you pay down debt, maintain a good credit score and live the life your loved one wanted for you.