Unclaimed Life Insurance Benefits

There are several reasons as to why life insurance benefits are sometimes left unclaimed. What is important is that they do not expire and are left in force waiting for the holder’s beneficiary to collect them. Due to some unavoidable circumstances, some beneficiaries tend to forget them. In case this happens to you or to someone you know, the first thing to remember is that claiming it is not a difficult task at all. Before doing so, review some facts concerning the benefits when a policy holder passes away.

First, you must which insurance term is used? It is the permanent type or the term type of insurance policy. In terms of the term type of insurance, then the benefit can be claimed before the term lapses. When the policy dies before the term lapses, unfortunately for the beneficiary as no benefits can be claimed. It’s different however, in terms of the permanent or the whole life insurance policy; some of the conditions are quite different. If premiums are paid in full up to the point the holder dies, then 100% of the benefit can be claimed by the beneficiary. In case where the holder has stopped making payment before the end of the term, then the insurance company can make two different arrangements. They may consider the term in extended status.

When the term is considered extended then the beneficiary may use the accrued cash value to switch to a term-type of insurance policy. The term policy will cost as much as the permanent life insurance. Another option is for the company to subject the policy to a paid-up or reduced status. This will allow the policy to be in-force but the amount of the benefit will not be the same. It will be reduced. On a more positive note, regardless of the option provided by the insurance company, it is completely possible for the unclaimed benefits to be collected.

If nobody informs the company of the death, then the payment will stop. In this case, the company will automatically send regular mail. This will also provide information concerning the possible insurance benefits.

An unclaimed policy can be found in different ways. The procedure is quite simple although it may also require extra effort. To begin the search, the following tips can be followed.

1. You may find information concerning the particular state or city where the policy holder lived. When insurance benefits remain unclaimed, they are automatically forwarded to the state – particularly to the Division of Unclaimed Property.

2. Look into the financial documents of the insured. You may begin your search by looking for insured checks. See the company where registered checks are from and make your inquiries.

3. Wait for any incoming mail. Insurance companies automatically send repeated mail to notify the insured to make his payments. This way, you can easily check the name of the company and you can also retrieve pertinent information.

4. The employers-past and present – of the policy holder can also provide useful leads.

Lastly, if none works, then it is time to get in touch with the Medical Information Bureau.

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