Grab Your Piece of the $7.4 Billion Life Insurance Pie

Kristin Orman By Kristin Orman, Research Analyst, The Oxford Club

Retirement Planning

Managing Editor’s Note: Last week, Kristin wrote about the importance of mapping out an “asset inventory” and stashing it away in a safe place. It’s a critical document that can help your heirs locate and manage the assets you leave behind.

An unbelievable $7.4 billion in life insurance benefits are floating around unclaimed. And it’s all because beneficiaries don’t know that they’re entitled to claim the money. The good news? It’s money you can recover. Below, Kristin shows how you can find and claim your piece of the pie.

You’ve got to love the insurance business, especially life insurance companies. They’re always hungry to collect your premiums, but they’re never in a hurry to pay out benefits.

When a policyholder dies, life insurance companies aren’t obligated to find and notify beneficiaries listed on the account. Instead, each beneficiary is responsible for seeking out the insurance company.

If no one steps forward, the insurance company continues holding the funds. But it will do so for only a period of two to seven years, depending on the company.

Eventually, it’s required to turn the unclaimed benefits over to the state in which the policyholder last resided.

Unfortunately, states don’t try too hard to find the money’s rightful owner either. Instead, they add the money to an unclaimed benefits pool, where it sits until the beneficiary steps forward to collect it…

If they ever do.

Being Oblivious Will Cost You

Most states maintain an online database of unclaimed benefits, including life insurance policies. And free nationwide databases like Missing Money allow beneficiaries to conduct a search across multiple states at once.

These databases are surprisingly easy to use. You simply enter the name of the deceased, and the website will spit out possible policy matches.

If you get lucky and find a match, you can start the claims process online by providing some basic identification information. (Make sure you use a secure internet connection.)

But don’t expect a check next week. The state isn’t in any hurry to hand over your money. There are several hoops you’ll have to jump through to prove you’re the rightful owner. You may even have to provide a death certificate.

Keep in mind, it usually takes three months or longer to collect funds. And you may have to make multiple claims.

Since life insurance is state-regulated, each individual state has its own pool for unclaimed benefits. While the databases are not centralized, the National Unclaimed Property Network catalogs links to each state’s database in one place.

Just be careful not to get duped by services that say they will find the money for you – for a fee, of course. Their services are a waste of money for something you can easily do yourself.

And some of them are fraud schemes set up to steal your identity. (It should go without saying, but you must always be careful about giving out your Social Security number.)

Put the Odds in Your Favor

Not everyone will find a long-lost inheritance. But millions of folks pass away each year without making loved ones aware of their life insurance policies. So searching for money that may be owed to you is worth a shot.

With $7.4 billion up for grabs, the odds of finding an unclaimed life insurance payout are a lot better than winning the lottery.

As I mentioned in my last column, my grandfather passed away without leaving any information regarding life insurance policies and beneficiary designations.

But using the services above, my family found a possible policy match for my grandfather last week. I’ll be sure to update readers if we’re able to claim any unclaimed benefits on his behalf.

Good investing,


P.S. Life insurance benefits aren’t the only unclaimed opportunities out there. Billions in pension benefits, tax refunds, savings bonds, mortgage insurance and dividend checks also go unclaimed each year. Make sure you get what’s owed to you by clicking here.