Unclaimed life insurance is when someone has life insurance coverage and dies, but the life insurance policy goes unclaimed, meaning the beneficiary does not get the money.
It sounds odd, but it actually happens quote a bit.
For some reason many people buy life insurance, pay their premiums on time for years, but they never let their beneficiary or anyone know that they have life insurance, and where the life insurance policy is located so when the time comes, their beneficiary can make a claim to get the money from the life insurance.
Perhaps people think the life insurance company will somehow miraculously know when they die, and then just send out the money from the life insurance.
That's not how it works.
Actually, the first thing you should do when you buy life insurance is ti find a safe place to keep the policy, and let your beneficiary know where it is, and that they are going to receive the life insurance proceeds when you pass.
But, how do they make a claim on your life insurance?
The beneficiary needs to have the life insurance policy information, the name of the insurance company and the phone number, so they can call the life insurance company and let them know you have passed away, when the time comes.
The life insurance company will then send out some paperwork for your beneficiary to complete and return, along with an original death certificate for the insured person who has died.
Then, the life insurance company reviews the claim and paperwork, and mails out a check to the beneficiary, which should arrive about 7-10 days after the insurer has all the paperwork they need.
If the beneficiary does not know there was any life insurance, and they can't find any life insurance policy, they may be unable to locate the life insurance and make a claim.
Then, the insured would have paid all of the money over the years in premiums, and no one would have benefited from the money. It's as if there never was any life insurance.
So, what can you do if a loved one has died, and you can't find any life insurance policy?
Here's an article that explains how and why this may happen, and what you can do about it. $1 Billion in Unclaimed Life Insurance. Is It Yours?