It comes without warning: Someone close to you dies unexpectedly. You think there may be a life insurance policy and that maybe you or another loved one is the beneficiary of that policy. But due to the shock of the sudden death, things are a bit unorganized. If there is a policy, you don't know what company has the policy or where to find it.
When someone dies, financial security is often a question for loved ones. Death is expensive. There may be medical bills. There may be other bills unpaid. And there are funeral and burial costs. All of these expenses may put you in a financial bind. Worse yet is when the decedent was the one who brought home the larger paycheck in the family.
Having the financial security of a life insurance policy can benefit you monetarily as well as emotionally. But, let's be honest, the life insurance company isn't going to go out of their way to look for you. Further, in 2019, in Tennessee alone, there have been a total of $18.5 million unclaimed life insurance benefits. That statistic is from the Tennessee Department of Commerce & Insurance (last updated in September 2019). Also, according to the Tennessee Department of Treasury, there is well over $976 million in unclaimed property in Tennessee, and it grows daily.
So, how do you find lost life insurance policies after the death of the policy-holder? In this article, we provide a little insight into how they can be timely discovered.
How Do You Find a Lost Life Insurance Policy?
Life insurance policies are a great tool to complement any person's estate plan. These types of policies have many advantages, including non-probated and tax-free protection for beneficiaries. Life insurance can also be used to pay for expensive funeral and burial costs. Locating a lost life insurance policy is critically important upon the death of the policyholder. But how do you go about doing it? Fortunately, it isn't an entirely difficult process; you just need to know where to look.
Veterans and Life Insurance Locator
Was the deceased a former military member? If so, the Veterans Administration will be able to help you search for unclaimed insurance.
Tennessee Life Insurance Policy Locator
There are many states – like Alabama, Missouri, New York, North Carolina, and Texas, among others – have a centralized database that collects and tracks insurance policies issued within the state. Tennessee, however, is not one of these states.
But Tennesseans can use the National Association of Insurance Commissioners (NAIC) Life Insurance Policy Locator. This locator allows beneficiaries and others (e.g., executors and legal representatives of the deceased individual) to search for possible life insurance policies or annuity contracts. To use the locator is easy. Simply conduct the search, and if there is a "hit," the relevant insurance company is notified, and then, in turn, the insurance company contact the beneficiaries.
The same process can be repeated using the Tennessee Department of Treasury's unclaimed property locator. These unclaimed properties also include life insurance. This database can be used to double check the results of the NAIC locator.
There are, of course, other ways to find lost life insurance policies. For example, you can:
- conduct a manual search of the decedent's files (e.g., records of bills, premium payments, old tax returns)
- check safe deposit boxes
- contact employers or unions – if relevant
- contact any financial advisors, estate planning attorneys, or accountants that may have helped the decedent during his/her lifetime
Finding life insurance policies after a loved one dies does not have to be a difficult process. But if you have been in a position in which you have had to search through mounds of paperwork, you understand the importance of being organized. It is always best to have a comprehensive estate plan. This plan includes making sure the appropriate persons are aware of the estate plan and all it entails, including any life insurance policies. For many, copies of life insurance policies (and other related documents) are often best kept with a trusted estate planning lawyer.
What Should You Do After You Find a Lost Life Insurance Policy?
Once you uncover a lost insurance policy, you want to make sure you have a copy of the death certificate. The life insurance policy carrier will require a copy of that document. At that point, you can contact the insurer to file a claim on the policy. The company should process the claim and, barring unforeseen issues, pay out the death benefit to the beneficiary.