Being a beneficiary of a loved one’s life insurance policy (the person you’ve chosen to receive the money known as a “death benefit”) isn’t something that happens to us every day. So it’s understandable that you’re confused about the rules for life insurance beneficiaries and how the process works. Let’s say you’re not sure if you’re a life insurance beneficiary. will someone tell you? or do you have to do something to find out?
In most cases, beneficiaries know they are a beneficiary because the policyholder tells them in advance. This is the ideal situation: a loved one who is still alive informs you that your life insurance beneficiary has been named and where to find the policy if you die while the policy is in force. If your loved one dies, you know how to locate the policy and contact the insurance company to make a claim.
But sometimes policyholders forget to tell their beneficiaries about the policy or the details: where they keep the paperwork, how much the policy is worth, and the name and contact information of the insurance company. You may have an idea that a life insurance policy exists and that you were meant to be a beneficiary, but you’re not sure. now what?
Many life insurance companies attempt to contact beneficiaries if they do not contact them first. The “trap” is that there is no automatic process that informs them about the deaths of the insured. Usually, the way the insurance company finds out that the policyholder has died and the policy needs to be paid for is through the beneficiaries or other family members. Many states require insurance companies to check Social Security’s “master death file” for deceased policyholders and try to notify their beneficiaries when they find a policyholder on that list. but that can take time. and it is not the rule in all states.
so don’t count on the company finding you. If you think your loved one might have had a life insurance policy and you might be a beneficiary, there are things you can do to find out.
One suggestion is to ask other family members, if possible. someone might know something you don’t. Assuming you have the authority to review your loved one’s personal documents (or can get permission), look at the insurance policy itself. If you can’t find the policy, look for life insurance receipts or evidence of payments in a checkbook register. remember to also check digital storage (computers and mobile phones). If you think your loved one may have been covered at work, contact that person’s former employer or union. If any of these searches return the name of the insurance company, sometimes that can be enough to start the claim process. (Having a company name and policy number is even better.)
let’s say you try those steps and get no results. don’t give up, there are still ways to locate a life insurance policy. You may want to contact the National Association of Insurance Commissioners (naic) for their free life insurance policy locator service, which searches for policies on the databases of many insurance companies. Another great resource might be your state Department of Insurance (DOI). some states have doi websites where you can enter information about the deceased and find out if they had insurance policies.
one last thought. If you have a life insurance policy of your own, make sure your loved ones know about it. that will help make it easier for them to get the money you want them to have.