Posted on March 5, 2010.
How to Collect on Lost Life Insurance Policies A parent has died. He had a life insurance policy with you listed as beneficiary. There's just one problem: the life insurance policy is absent. You have no idea which insurance company wrote it.
If you find the missing life insurance policy in the future, you are still eligible to receive the death benefit?
Hope they paid their insurance bills
If you are a beneficiary and you find the life insurance policy was lost shortly after the death of the insured (in the six months to one year, for example), claiming the death benefit should be without problem.
First, determine if the insured had a life insurance or permanent. If the insured held a long-term policy, you will receive the death benefit if he died before the end of the period of insurance. If he died after the expiry of the policy, you get nothing.
If the insured had a permanent life insurance policy, you will receive money if the death occurred while the policy was "in force", meaning all premium payments have been made to date death. If the death was some time ago, you will receive the benefit with interest from the date of death.
If the life insurance policy lapses - meaning the insured stopped making premium payments before his death - there's a chance you might get nothing. When a permanent life insurance policy lapses, most insurance companies move from its status of permanent insurance to one of two options:
"Extended Term" - The insurance company uses the cash value of the policy of buying a life insurance policy term for the same death benefit using the cash value of the policy. The death benefit will continue for the longest period, the cash value will be buying.
"Reduced paid up" - The insurance company will keep the policy in force permanently, but will reduce the death benefit.
Gerry Brogli, an actuary for State Farm, says in most cases his company, the permanent policy continues as extended term if it lapses. At State Farm, has extended the mandate is the default option for most permanent policies.
If the policy lapses, and the period extended term expires before the insured dies, the policy is worthless and the life insurance beneficiary will receive nothing. If the insured dies before the period of extension term is up, the beneficiary will receive the death benefit. If the policy lapsed because the insured died (thus ending premium payments and causing the insurance to be placed in a position extended term), the beneficiary will still collect the full death benefit, regardless of when that an extension of the duration has increased. The recipient must still provide the insurance company with a death certificate to verify date of death.
There is no time limit during which a beneficiary of life insurance must step forward to collect the money, said Jack Dolan, spokesman for the American Council of Life Insurers. "If someone comes 30 years after [the death] of the insured, the company is still good on it," says Dolan.
What happens if the reports do not death?
If the insured dies and the insurance company did not learn of the death, the policy lapses. Insurance companies take steps to find out why a policyholder stopped making payments.
When an insurance company to cease making payments, he sends letters to information secured him the policy may lapse.
