Locating a Lost Life Insurance Policy

Because life insurance policy holders sometimes pass away before they inform their beneficiaries of the policy’s existence, many death benefits go unclaimed.

Insurance companies would like to to distribute benefits to the individuals to which they are due, but the responsibility to claim the money ultimately lies with the beneficiary. If you are named as a rightful heir to a death benefit, and it has been only a short time since the insured died (less than one year) then claiming your money should not be a problem. There is no time limit within which a beneficiary must collect.

First, you will need to figure out if the deceased had a term or permanent life insurance policy. If he or she had term life insurance and died before the term expired, you will receive a death benefit. If your loved one died after the policy’s term ended, you will be entitled to nothing.

On the other hand, if the policyholder held a permanent life insurance policy, you will receive your money if the policy was “in force, meaning the policy premium was paid at the time of death.

Lapsed Policies

If premium payments were stopped before the insured died, there is a chance you may not be entitled to any money. In the event that a policy lapses, many life insurance companies will switch a permanent account to one of two alternatives:

  • An Extended Term is when the life insurance company takes the cash value of a permanent policy and converts it to a term policy. The death benefit will remain in place for as long as the cash value pays for the policy. In the event of the policy lapsing and the extended term expiring before the insured dies, the beneficiary gets nothing.
  • A Reduced Paid Up means a permanent policy remains in effect, but its death benefit is reduced.

If the insured stops paying their premium, the insurance company will take steps to see why payments have stopped. They will attempt various methods to contact the insured, but if those methods are unsuccessful, the policy may lapse.

Missing Policy Service

In the event that you do not know the name of the insurance company that issued the policy, you can contact the Missing Policy Service by sending a self-addressed envelope to:

  • American Council of Life Insurance
    1001 Pennsylvania Avenue, NW
    Washington, DC 20004-2599

They will forward your inquiry to almost 100 of the largest life insurance policy providers in order to try to locate the lost policy.

The best thing to do is to make sure you tell your beneficiaries that they are named in the policy. The sad fact is that if you pay into a life insurance policy, and the beneficiary never steps forward to collect the money, you will have paid premiums for nothing.