Unclaimed Insurance Money: What You Need to Know

Did you know that millions of dollars in life insurance policies go unclaimed every year? According to Consumer Reports, approximately one-quarter of life insurance payouts are not claimed, which translates to billions of dollars in unclaimed insurance money.

Why Does Unclaimed Insurance Money Exist?

The main reason for unclaimed insurance money is that beneficiaries are not aware that they are entitled to receive it. In some cases, the policyholder did not inform their beneficiaries that they had taken out a life insurance policy in the first place. In other cases, beneficiaries may not be aware of the policyholder’s passing, or they may not know how to go about collecting the insurance proceeds.

In addition, many people have multiple life insurance policies and may have forgotten about one or more of them. When policyholders move or change jobs, they may not always remember to update their beneficiaries or contact information with their insurance companies, further contributing to the problem of unclaimed insurance money.

How to Find Unclaimed Insurance Money

If you think you may be entitled to unclaimed insurance money, there are several steps you can take to try to locate the policy:

Step 1: Check with the Insurance Company

If you have reason to believe that a loved one had a life insurance policy, the first step is to contact the insurance company directly. Be prepared to provide the policyholder’s name, date of birth, and Social Security number, as well as your own contact information.

If the insurance company confirms that a policy existed, they will typically require proof of death, such as a death certificate, as well as documentation showing that you are the rightful beneficiary.

Step 2: Search Unclaimed Property Databases

If you are unsure which insurance company to contact or have reason to believe that a policy may have been lost or forgotten, you can search state and federal unclaimed property databases for unclaimed insurance money.

Some states require insurance companies to submit information on policies that have gone unclaimed after a certain period of time, typically three to five years. These policies are then turned over to the state and listed in the unclaimed property database.

Step 3: Hire a Professional Locator

If you have exhausted all other avenues and still cannot locate a life insurance policy, you may want to consider hiring a professional locator. These individuals and companies specialize in tracking down lost policies and can often be successful in cases where family members have been unsuccessful.

FAQ

What Is Unclaimed Insurance Money?

Unclaimed insurance money refers to life insurance policies that have not been claimed by beneficiaries after the policyholder’s death. This can happen for a variety of reasons, such as beneficiaries not knowing about the policy, the policyholder not updating their information with the insurance company, or beneficiaries simply forgetting or losing track of the policy.

How Much Unclaimed Insurance Money Is There?

It is estimated that there are billions of dollars in unclaimed insurance money, with approximately one-quarter of life insurance payouts going unclaimed each year.

How Can I Find Out Whether I Am Entitled to Unclaimed Insurance Money?

The first step is to contact the insurance company directly, providing the policyholder’s name, date of birth, and Social Security number. If you cannot locate the insurance company, you can search state and federal unclaimed property databases. In some cases, you may want to consider hiring a professional locator.

What Happens to Unclaimed Insurance Money?

When life insurance policies go unclaimed, the funds are typically held by the insurance company for a certain period of time, usually three to five years. After this time, the funds are turned over to the state and listed in the unclaimed property database. Beneficiaries can still claim the funds at any time.

Is There a Time Limit for Claiming Unclaimed Insurance Money?

Each state has its own laws regarding unclaimed insurance money, but in most cases, there is no time limit for claiming the funds. However, it is generally recommended that beneficiaries claim the funds as soon as possible, to avoid any potential complications or errors.