Finding a policy nobody can locate

The two free searches

The NAIC operates a free Life Insurance Policy Locator. You submit a request and participating insurers search their records for policies on the deceased, contacting the beneficiary if a match is found.

Separately, search your state's unclaimed property programme. Where an insurer cannot locate a beneficiary, benefits are eventually turned over to the state, and those databases are free and searchable by name.

Both are free, both are underused, and money genuinely sits unclaimed in them.

Where else to look

• Bank statements for premium payments to an insurer
• Tax returns showing interest paid by an insurance company
• Employer and former employer benefits departments — group coverage is easy to forget
• Unions, professional associations and alumni groups
• Mortgage and loan files, for credit life coverage attached to a debt
• Safe deposit boxes, address books and email for insurer correspondence
• Any policy a parent may have bought decades ago on a child who is now the deceased

The practical first week

• Order several certified copies of the death certificate — every institution wants one and copies are harder to obtain later
• Find any policy or declarations page; the claims number is on it
• Call the insurer and open the claim
• Ask what each named beneficiary needs to submit
• Do not cancel other policies or accounts yet

How the money can be paid

A lump sum is the default and the simplest. Insurers commonly also offer an account they hold that pays interest, or instalment options.

One difference worth knowing before electing anything: the death benefit is generally not subject to federal income tax, while interest paid on money the insurer holds generally is.

There is rarely a reason to decide quickly, and several good reasons not to.

If the claim is reviewed rather than paid

Where a death occurs within the contestability period after a policy was issued, insurers routinely review the original application against medical records before paying. That adds time and is standard practice rather than a sign of trouble.

If a claim is denied, ask for the reason in writing and take it to your state insurance department, which costs nothing.