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.

Where to look, in the order most likely to work

Policies are found in ordinary places far more often than in official databases, and the search is worth doing systematically rather than hopefully.

• Bank and card statements for the last two years, looking for regular payments to an insurer - this finds more policies than any other single method
• Tax records, which sometimes show interest or dividends from a permanent policy
• Email, searched for the words policy, premium, renewal and the names of insurers
• Address books, filing cabinets, safes and safe deposit boxes
• The employer, current and former, for group life cover - which is commonly overlooked and commonly still in force
• Any professional association, union or credit union the person belonged to
• Mortgage and loan files, where credit life cover is sometimes attached

The searches run by regulators

The National Association of Insurance Commissioners operates a life policy locator that circulates a request to participating insurers, which then search their records and respond to anyone entitled to the information. Several states run their own equivalent.

These are free, and worth starting early because responses take time. They are also not exhaustive - participation varies and older policies are less reliably indexed - so they belong alongside the document search rather than instead of it.

Unclaimed property offices are the other place to check. Where an insurer knew of a death but could not locate a beneficiary, proceeds are eventually turned over to the state, and every state runs a searchable database.

What the insurer will ask for

Once a policy is found, the claim itself is usually straightforward. Insurers generally want a certified copy of the death certificate, a completed claim form from each beneficiary, and proof of identity.

Order several certified copies of the death certificate at the outset. Every institution wants an original and few return them, and obtaining more later is slower than obtaining them at the time.

Where the policy is recent, the insurer may review the application against medical records - the contestability period is standard and applies for a defined time after issue. It is routine rather than an accusation, though it does extend how long the claim takes.

If you are not the beneficiary

Insurers will not generally discuss a policy with someone who has no standing, which stops the search before it starts for a lot of people trying to do the right thing.

Standing usually comes from being the named beneficiary, the executor or personal representative of the estate, or a legal next of kin where no estate has been opened. If you are administering the estate, get the appointment paperwork early - it unlocks most of the process, and almost everything else waits on it.

Where you believe a policy exists but cannot establish standing, the regulator-run locator services are still worth using. They circulate the request to insurers, who respond directly to whoever is actually entitled to the information rather than to you.

Preventing the problem for the next person

Almost every difficulty on this page is created by one thing: the person who bought the policy was the only person who knew it existed.

The fix takes ten minutes. Write down the insurer, the policy number, the type of cover and the agent's contact details, and put it somewhere a beneficiary would actually look - not exclusively in a safe deposit box that only you can open, which is a common and self-defeating arrangement.

Tell at least one person the document exists and where. Then review the beneficiary designations while you are there, because those control who receives the money and they override a will.

How long it usually takes

Where a policy is found and the paperwork is complete, life insurance claims are frequently settled within weeks rather than months - it is one of the faster claim types.

The delays that do occur are usually one of three things: a missing death certificate, a beneficiary designation that is unclear or out of date, or a policy still inside its contestability period, where the insurer reviews the original application against medical records.

None of those are unusual and none imply a problem with the claim. Providing complete documentation at the outset is what shortens all three.

Where to start today

Order several certified copies of the death certificate, because every institution wants an original and few give them back. Then work the bank statements - that finds more policies than anything else. Start the regulator locator requests early since they take time to come back, and check the unclaimed property database for every state the person lived in.

Employer and association cover is the most commonly missed

Group life cover through an employer, a union, a professional association or a credit union is the category that most often goes unclaimed, because it never generated a premium payment the family would recognise on a statement.

Contact the most recent employer's benefits or human resources team directly, and any former employer where the person may have converted or ported a policy on leaving. Ask specifically about basic life, supplemental life and any accidental death benefit, which are frequently three separate things.

Take your time on the money itself

Once a claim is paid, there is rarely any need to decide quickly what to do with it. Insurers sometimes offer to hold the proceeds in a retained asset account rather than paying a lump sum, and that is a choice rather than a default. Ask what the alternatives are, and give yourself room to think.