After a death, heirs sometimes do not know if there was life insurance in force. The Insurance Information Institute (III) has published five steps to use when tracking down a lost life policy.
The first item on the list is a thorough search of the person's home and files, as well as bank safety deposit boxes and other storage places. The III recommends that people also check address books where insurance agents or companies may be listed.
If the deceased was working or recently retired, heirs should contact the most recent employer to see if the person in question was covered by an employer-sponsored life insurance policy or had converted it into permanent coverage when the job ended.
Bank books and canceled cheques may be another fruitful area of inquiry, where heirs may be able to find that payments were made to a life insurance company at some point in the past.
In the United States, the III recommends people contact their state government to see if it has any unclaimed money from life insurance policies, since insurers who cannot locate beneficiaries are obliged to pay benefits to the state in which the policy was purchased. (In Canada, heirs may contact the OmbudService for Life and Health Insurance to request a policy search.)
Finally, the III notes that a consortium of life and health insurers, the MIB Group, maintains a database of individual life insurance applications underwritten in the United States since 1996. For $75, they can conduct a search.
“Following the death of a family member, there are occasionally questions about whether a life insurance policy was in force,” comments Dr. Steven Weisbart, senior vice president and chief economist at the III. “This confusion could be prevented, of course, if all policyholders simply told their loved ones about the existence of any policies naming them as beneficiaries but this, unfortunately, is not always the case.”