Every year millions of dollars in life insurance death
benefits go uncollected. Both the
insurer and the insured can lose track of each other. One Boston insurer recently came under
fire in the press for “losing track” of over 800,000 policyowners. There are millions of insurance policies
that are “lost” and you are not alone in trying to track down a “lost”
Many people do not realize that some life insurance
policies can continue to be in-force even after they borrow money from them
or even stop paying the premiums.
Even cancelled policies can have residual value depending on the
non-forfeiture option selected. As
a result, beneficiaries can be left sifting through paperwork for old
policies that the paperwork was mistakenly thrown-out long ago.
Unfortunately there is no one database listing all
insurance policies issued to help you in your search. To find a policy you must know whom the
policy is with and certain key confidential information about the
owner. If you are beginning your
search knowing only that your loved-one had a policy, but not sure who it
was with, then you have over two thousand possible companies to contact. This is a huge task and there is little
assistance available on what to do and where to start.
WHERE TO LOOK FOR LOST LIFE INSURANCE POLICIES:
In looking for a lost policy everyone first assumes an
insurance company is the place to look.
There are actually five places to look and the insurance companies
are only one of them.
- Insurance Companies- There are over 2000
possible companies that issue individual life insurance policies.
- Employer- A frequent benefit is a
group life policy. Since,
technically the employer is the policyowner you must contact the
employer. The insurance
company does not keep the records on the individuals covered.
- Financial Institutions- Many banks, credit
cards and other financial service providers offer insurance to their
customers- sometimes it was free.
- Associations- Many membership groups
and professional associations also offer insurance benefits.
- The State- State abandoned
property offices collect huge numbers of abandoned insurance benefits every
year to hold until the true owner can be found.
The process of contacting insurance companies is
strait-forward, but time consuming.
Find the company and ask if there is a policy. If there is then you ask for the
appropriate forms to make a claim.
The information you will need to have available is:
- Name On Record
- Social Security Number
- Address On Record
- Policy Number
may not need all four. A lost
policy can often be found if you have the name and Social Security number
or only the policy number. Be aware
that the insurance company may not have the right name or address on
record. People get married and
move. You need to be prepared with
any maiden name or prior address.
If you do not know which insurance company the policy was
with, then who do you contact?
There are about 2000 life insurance companies in the U.S. The top 100 largest insurance companies
do account for over 90% of all policies sold. The top 100 is therefore a good place to start. There are no guarantees you will find
that lost policy unless you search all the companies. Each insurance company has their own
records and they do not share the names of policyholders among
themselves. You can contact your
state’s Department of Insurance to find out what companies are licensed to
sell insurance in your state.
Individual states can have over 500 companies licensed to do
business there. Many people are
known to buy a policy while on a business trip or at lunch while in a
Unless you check with all of them you may be missing the
one company a policy is with. Also,
if you do find one policy, remember that many people have several policies
with different companies. Do not
stop with the first company you find a policy with.
Many employers offer their employees group insurance
coverage as a benefit. If the
insured died while coverage was in effect you may be entitled as a beneficiary. Even if the employee was retired the
group insurance coverage may have been extended. After an employee leaves to work elsewhere, many group
insurance contracts allow the employee to continue coverage on an
individual basis- sometimes called a “group conversion”. Make a list of every employer and
contact their human resource or benefits department. Just because an employer does not offer
insurance benefits now does not mean they did not offer it back when the
person was employed there. Be
persistent. With these “group
contracts” the life insurance company does not keep track of the individual
employees. Technically the employer
is the insured and the employee is just one of the group.
ASSOCIATIONS AND FINANCIAL INSTITUTIONS
Many other places sell or offer life insurance. Banks, credit cards, and professional
associations often do. Both my bank
and credit card gives me small but free policies just for having accounts
with them. The paperwork can be
easily lost since they are often free or low cost. Make a list of these organizations that
your loved-one had accounts with.
Then contact them. These are
also often “group contracts”.
Eventually many lost policies that still have value end
up with the state. State laws
differ, but if the insurance contract had value in it, and this is not
necessarily the face value, after a certain length of inactivity the money
is turned over to the state. The
idea is it is not the insurance companies money so it should be used for
the public good until the true owner claims it. You can contact the state unclaimed or abandoned property
office to see if they are holding any money from the policy. Many states even allow you to do a
search with them on-line.
HOLOCAUST ERA LIFE INSURANCE POLICIES
There is new hope for finding unpaid life insurance
policy benefits issued by European companies.
of those killed in the Holocaust have had special difficulties collecting
death benefits on European life insurance policies. Death claims are very difficult to make
when all policy paperwork was destroyed by bombings and the additional fact
that death certificates do not exist for those killed in concentration
camps. For years there have been
efforts to ease the burden of proof required to claim these death benefits.
International Commission on Holocaust Era Insurance Claims has been joined
by several European insurance companies.
It’s purpose is to assist heirs of those who held unpaid insurance
policies, the records of which were either lost or destroyed during the
mass genocide and destruction of World War II. The “Tools” page of this website contains a special section
and links on finding these policies.
IF YOU HIRE
SOMEONE TO SEARCH FOR YOU
You may be approached by someone offering to do the
search for you. There are an
increasing number of people claiming to be “professional” unclaimed
property locators. Usually they do
not focus on insurance policies.
This has been a major problem in the past. The government is trying to regulate this activity to curb
the abuses. Anybody can say they
are an expert finder of lost policies, claim to have done it for others,
say there is no fee unless found and even allege to have “contacts” at
Hiring them with the attitude, nothing risked, nothing to
lose, is dangerous. You must give
them confidential information to have them do the search properly.
Learn what they will and will not do for you. Ask them where they search. How many insurance companies do they
contact? There are currently about
2000 life insurance companies selling individual policies. For the fee they charge do they contact
as many as you want them to? Will
they even tell you how many they contact?
If they say they have friends in the industry of “contacts” then ask
how many and where? If you do not
like their answer then do not hire them.
Do they also search for group policies with associations and
employers? Do they contact the
state abandoned property offices?
The important point here is to know what you are and are not
buying. If you do not ask and they
come back and say there are no policies in that persons name, you would not
know what they skipped.
Ask them how much they charge. Do they charge a flat fee, a percentage or both? If you hire someone on a percentage
basis you could be shocked to find you are liable to pay the whole amount
even if it turns out you are one of many beneficiaries. For example, if you agree to a 30%
finders fee and it turns out you are one of three beneficiaries, you would
end up paying the 30% fee out of your 33% share of the benefit!
Also check to see if what they charge is even legal! Your
state law governs this. In
Massachusetts, they can never charge more than 10% and in other situations
it must be FREE. Since I frequently
see “expert finders” charging as much as 30%, make sure you are not being