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A life insurance payout can make things a little easier at a very difficult time. But what if you don’t know who your loved one’s policy was with or if they had one at all? This guide helps a would-be beneficiary track down a life insurance policy when someone close has passed away.
When a loved one passes away, a life insurance payout can make a big difference. If you don’t know if they had life insurance, or who it was with, it’s well worth spending some time to check.
Here’s what to keep in mind:
When a life insurance policyholder dies during their policy term and the beneficiary doesn’t make a claim, the policy is said to be lost or unclaimed.
A surprising number of life insurance policies go unclaimed – there’s thought to be at least £2bn in the UK that hasn’t been paid out. And this means far too many people miss out on life insurance benefits that they’re due from unclaimed policies.
There are lots of reasons a life insurance policy might not be claimed. For example, it could be that:
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It’s especially important as the onus isn’t on the life insurance company to proactively contact the beneficiary. They may not even know the policyholder has passed away. Although some insurers do search the death register to identify deceased policyholders, they’re not required to. So you can’t rely on this happening.
If there’s a will, it’s generally down to the executor to check if there are any active life insurance policies and let the insurer know. But if there isn’t a will, or the executor doesn’t have details, potential beneficiaries like close family members will need to get involved. It will be your job to identify a lost life insurance policy, notify the insurer and begin a claim.
Of course, the sooner you claim, the sooner you’ll benefit from the payout. But you may not feel ready to do this for a while – especially if you need to do a bit of detective work to track down a lost life insurance policy.
Luckily, there’s no time limit whatsoever for claiming on a life insurance policy, so you can take all the time you need. If you come across an unclaimed life insurance policy even many years later, you can still make a claim.
If 15 years has passed and a policy still hasn’t been claimed, the money becomes part of the government’s Dormant Assets Scheme and will go to charity. So any unclaimed life insurance money does go to a good cause even if the beneficiary hasn’t claimed it.
It’s important to know that you can still claim on the policy and get a payout even after this has happened. It might just take a little longer.
When someone passes away in England and Wales and their estate isn’t claimed, it’s held under Bona Vacantia rules and the assets are moved to the government’s Bona Vacantia department. It’s slightly different in Scotland.
If your loved one has passed away and you don’t know if they have a life insurance policy, don’t just leave it and potentially miss out on what you’re due.
Here’s a guide to the steps you can take when finding lost life insurance:
Step one: Have a look through their files – digital and paper. You might find life insurance policy documents filed with other paperwork and records.
Step two: Go through their bank statements. Can you see any payments to insurance companies? Don’t forget to check credit card statements, too. Remember, premiums can be paid monthly or annually, so go back at least a year. When you check bank statements be aware that a direct debit payment reference may match the life insurance policy number.
Step three: Check with their professional advisers. Did they have a financial adviser, an accountant or a lawyer? They might be able to help point you in the right direction.
Step four: Get in touch with current or past employers. If your loved one had a job, they might have had life insurance or death-in-service benefits through their work.
Step five: Speak to their friends and other family members. They could have mentioned a life insurance policy to someone else.
Step six: Contact an insurance company or bank directly. Don’t be afraid to get in touch and ask them if they have a record of any policies. Banks often offer products like life insurance to their customers.
There are also companies that can help you track down a policy and find unclaimed assets, but there’s a cost for their services and they can’t guarantee that you’ll get a result.
Once you think you have the name of the provider, you should be able to find them on the Association of British Insurers’ searchable member database. You can then get in touch with the insurance company to start your claim.
However, over the years companies do change names, merge, get taken over or fail. Don’t worry – even if this is the case, there are still ways to track them down.
Particularly popular in the 19th and 20th century, lots of mutual and friendly societies have since gone through mergers and demutualisation. But there are still ways to find them.
If you think the insurance provider might have failed, the Financial Services Compensation Scheme (FSCS) could be able to help. The government set up this scheme to help people whose financial services provider has failed.
You can visit the FSCS website and search for the company name. If the insurer is on their list, you might be able to get compensation from the scheme. Depending on when the insurer failed you could receive either 90% or 100% of the claim value.
Once you’ve gone through the process of finding lost life insurance and discovered that there is a policy, here’s how to make a claim.
Note: If you don’t have any policy details except the provider’s name, they’ll still be able to trace the policy. You’ll need to give them information like the name, address and date of birth of the person who has passed away.
The insurance company will guide you through the process and help make sure you get things right.
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If the payout is approved, you’ll get a lump sum payment paid in Sterling to a valid UK bank account. There’s no set timing for how long this will take.
What happens to the payout depends on the type of policy:
Related reading: How long does it take for life insurance to pay out?
Financial pressures make things worse at a very difficult time, so having a life insurance payout can make a big difference when someone close dies. And having all the details readily to hand makes life easier for your loved ones at this time.
Here’s how to make sure your policy doesn’t get lost:
Disclaimer: This information is general and what is best for you will depend on your personal circumstances. Please speak with a financial adviser or do your own research before making a decision.
As an experienced content writer, Chloe has spent over 25 years writing for large businesses, particularly in the financial sector.
If you know there’s a policy, but you’re not sure if you’re the beneficiary, first try contacting the executor of the will, if there is one. They or the estate’s administrator can contact the insurer to confirm who the beneficiary is.
You can also get in touch directly with the insurer. They may ask for some information, like proof of identification before they speak to you.
No. It’s up to the beneficiary or executor to contact the insurer. Although some providers have started to search the death register to identify possible policyholders, this isn’t something you can rely on.
You can start your life insurance claim as soon as you’re ready after your loved one has passed away. And remember that there’s no time limit – so you can choose to claim on day 1 or day 1,000.
A life insurance payment is normally tax-free so a beneficiary will not be liable for income tax or capital gains tax, but in some cases they could be subject to inheritance tax (IHT). This is because life insurance payments are considered part of your estate and count towards your IHT threshold. Getting a policy written into trust avoids this.
