Life insurance is an important way to ensure your loved ones have much-needed protection and peace of mind when you pass away. In the event of your death, your beneficiary will typically file a claim with the carrier, and your death benefit will be paid out. However, what happens if no one claims the policy?
This preventable situation can occur for a variety of reasons: the beneficiary may not be aware they’ve been named on a life insurance policy, the carrier hasn’t been informed of the policyholder’s death, or the beneficiary’s contact information isn’t up to date. Let’s walk through what happens when a life insurance policy goes unclaimed.
How to Start a Life Insurance Policy Search
There are several ways to locate a life insurance policy. These range from a simple search of your or your loved ones’ homes and offices to contacting state agencies and financial professionals. If you think you’re the beneficiary of a life insurance policy but can’t find the right information, try the following:
Look in filing cabinets, storage areas, and email inboxes. Not sure if your loved one had a life insurance policy? Checking common areas to look for billing notices or receipts for premium payments is often the first step. Bank statements, email inboxes, and credit card bills are all great places to seek this information.
Check with state officials and agencies. The NAIC offers a robust Life Insurance Policy Locator System. This organization partners with participating insurers to look for life insurance policies in your loved one’s name. You can also search their state’s unclaimed property department. You can usually perform a life insurance policy search by name.
Contact employers, financial professionals, and accountants. Your loved one’s financial advisor likely has information related to insurance policies and other key documents. You may also want to reach out to their employer for group life insurance information (if applicable). The insurance agent responsible for their home or auto policies might have sold them life insurance coverage, too.
What happens to life insurance proceeds with no listed beneficiary?
When the insurer is informed of a policyholder's death, they will take several steps to locate the policy’s beneficiary. They’ll typically begin by checking the record of deaths reported to the Social Security Administration. This record is known as the Death Master File and helps insurers track down unclaimed death benefits.
If successful, the insurer will work with the beneficiary to complete the process of filing a claim. If they can’t find a beneficiary, they’ll typically turn the unclaimed benefits over to the policyholder’s most recent state of residence. State treasurers’ offices will usually hold this money until someone files a claim and provides any necessary documentation.
Documentation to claim a death benefit can be as simple as a driver’s license and proof of address. If the claim is more complicated, it can involve producing copies of the death certificate and proof of relationship to the policyholder. Making sure your beneficiary information is accurate and up to date is crucial in helping your loved ones avoid this hassle so they can access the benefits they need.
How to Claim Life Insurance After Death
If you have the available information, contact your loved one’s insurance claims department and file a claim for death benefits. No matter what the process looks like, you’ll want to obtain several copies of the death certificate; you’ll be mailing these off to all invested parties. Methods of claiming these benefits differ by carrier. For example, some insurance companies may ask that you send a form and a copy of the death certificate. Others may send you a packet of forms with a request for information.
How long do you have to claim life insurance?
Generally, there is no timeframe for claiming life insurance benefits after the policyholder passes away. However, initiating the process in a timely manner can help you avoid delays in receiving your benefits. This process varies by carrier, and it can take anywhere from two weeks to two months to receive a life insurance payout.
Delaying the claims process for an extended period may lead to complications, especially if there are questions about the cause of death or other circumstances. In some cases, prolonged delays could potentially impact the validity of the claim. Making sure you know the claims process requirements of your specific carrier can help you file a claim with ease and receive the benefits you need without delay.
Understand Your Life Insurance Policy with SelectQuote
One of the greatest gifts you can give your loved ones is security and peace of mind through a life insurance policy. If you have questions about how your policy works or how to change, update, or check in on your beneficiary information, SelectQuote can help. Our licensed insurance agents will work with you to understand your needs and make sure you have the knowledge you need to make informed decisions about your policy.
