Navigating your loved one’s insurance policies

Keys to finding and claiming insurance benefits

• Find out if your loved one had an insurance policy by looking through their papers, drawers, files, checkbook entries, contracts, email and mail correspondence, safe-deposit boxes, tax returns, or asking former employers or their union.

• State databases can also help you find out whether your loved one took out any insurance policies.

• Life insurance is not the only type of insurance that may have a payout; auto insurance, travel insurance, or workers compensation are among those that may have payouts as well.

• Insurance companies will often contact beneficiaries and send them a form to claim their award. If not, contact the company directly via certified mail.

• Beneficiaries of your loved one's insurance policy do not need to use their award to pay off their loved one's debts.

Many people buy life insurance at some point in their lifetime, primarily as a way to offer financial assistance to their dependents or other loved ones after they pass away. It can also be an important source of emotional comfort, knowing that the person is looking out for you even now that they are gone.

To take advantage of a policy, however, the intended recipient must be made aware that their loved one had life insurance in the first place. The recipient also has to know that they have grounds to file a claim.

For many people, that may be easier said than done. Often the bereaved have no idea that their loved one had life insurance. The person may have paid for a policy years ago, and the related paperwork has long since been tucked away and forgotten. Or perhaps the beneficiaries have moved and the insurers are unable to notify them of their payout because they lack current contact information. Indeed, unclaimed awards are said to range from between several million dollars to a billion dollars a year.

These unclaimed insurance funds enter state coffers, just as other types of unclaimed property do. That does not mean, however, that a beneficiary must be resigned to never receiving their award in the event they learn of it down the road; if they have not claimed their award from the insurer, they can claim the money from the state at a later time.

Where to look for insurance policies

As you sift through the papers, drawers, and files in your loved one’s home, look for anything insurance-related, such checkbook entries, contracts, or other correspondence. Check the mail for insurance premium bills as well. Look in safe-deposit boxes for contracts. It is common for people to obtain life insurance through their workplace, so ask your loved one’s former employers or unions if they had insurance through their institutions. Peruse recent tax returns to see if any there is interest income from insurers.

If your loved one had an insurance agent or a financial advisor, ask that person about their policies. You may even want to call individual insurance companies to inquire. There is no reason to leave money due to you on the table, even while you grieve and mourn your loss. Your loved one left you this policy as a gift and an expression of love. Pursue and accept it in that same spirit.

Check state databases

Individual states can also be a good source of assistance in tracking policies. Twenty-nine states offer search services for locating insurance policies bought within their borders. You can also check unclaimed property offices via state comptrollers’ offices. The National Association of Unclaimed Property Administrators can be of service as well. If other options prove inadequate, you can hire private location services to locate lost policies for a fee.

Other insurance payouts

In some cases, a loved one might have other types of insurance that have named beneficiaries and pay out in particular circumstances, such as auto insurance, AD&D travel insurance, or workers’ compensation.

For cases like car or travel insurance, payouts work the same way as they do for life insurance. In the case of workers’ comp, consult with local insurers and the state to determine how the death benefit on such a policy pays out. 

How to get your award

Insurance companies will often notify you of your benefit and send you a claim form to fill out. If they don’t, contact the company yourself. Write them via certified mail, and submit an original death certificate, the original life insurance policy naming you, and your own government-issued identification.

The relationship between the policy and the estate

If your loved one named you as a beneficiary on their life insurance, do not be concerned about whether the award can somehow be used to pay off your loved one’s debts. Insurance beneficiaries are generally not held responsible for such debts.

If your loved one named their estate as the beneficiary, on the other hand, the award will go into the estate account, and may then be used to pay debts. Some people name their estate as beneficiary because they mistakenly think that doing so will benefit their heirs. If you are in a position to take out a life insurance policy yourself, make sure that you understand who you are naming as beneficiary so that they can collect in full when the time comes.

For many people, dealing with the financial aspects of a loved one’s estate and inheriting money can feel unsettling and perhaps even crass. But insurance is there to protect everyone. Having this safety net will allow you to move forward with a small extra degree of freedom bequeathed to you with love and care.

You may be eligible for free bereavement support. Empathy can help with everything from funeral planning to estate administration, with step-by-step guidance and real-time expert support. Many people get free premium access to Empathy as a benefit with their life insurance claim. We partner with New York Life, Guardian Life Insurance Company, Bestow, Lemonade, and other leading carriers. When you make your life insurance claim, talk to your representative about whether Empathy is a benefit they offer.