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Generally the beneficiaries of a life insurance policy make a claim for payment almost immediately and receive their payments in a timely manner. In some cases, however, beneficiaries are unaware of their potential inheritance; they may not know of the existence of the life insurance policy or, in rare cases, may not even be aware of the death of the insured individual. Beneficiaries’ unclaimed life insurance policies are often the result in these cases. If the insurance company is not made aware of the death of the insured, the policy may actually lapse after the death due to nonpayment of premiums. This is easily remedied if the policy is found by providing the insurance company with a death certificate; however, if this is not done in a timely fashion, additional delay may result due to the necessity of obtaining the death certificate from proper authorities.
How to Find Them, How to Avoid Them
Regardless of when the claim is made, beneficiaries are entitled to the proceeds of the life insurance policy. Even in cases where the insurance company no longer exists or has been bought by another firm, the liability for the policy still remains, although it may take some work to determine the correct company with which to file a claim for benefits. If the beneficiaries have the original documentation, an online search can sometimes locate the company that is currently responsible for the policy. If the policy has gone unclaimed for long enough, it may be reported to the state unclaimed funds administrator. Most states maintain an online database that lists the names of individuals who are owed funds from a variety of sources, including life insurance policies; these databases are available free of charge.
In order to avoid beneficiaries’ unclaimed life insurance policies, most policyholders keep careful records and documentation of all policies held in their name. By ensuring that all beneficiaries are aware of the policies and that a comprehensive list is readily available, the insured individual can be certain that his or her wishes will be carried out accurately. Additionally, this can prevent unnecessary worry and financial stress for the beneficiaries and offer a sense of security during their time of loss.