Far too many Americans don’t have any life insurance. Most Americans don’t have enough life insurance. Life insurance is important to help your family deal with the financial stresses that they will face when losing a family member. Your family has to pay your burial expenses, settle your debts, pay your medical bills for your final illness or accident. Life insurance is also essential in replacing your income. How will they pay the mortgage on the home, send your children to college, or fund their retirement with you and your abilities gone?
All that said, many people who were responsible and did pay into life insurance policies for years and years have died and that money has NOT gone to their families. According to original reporting by ‘The Wall-Street Journal’ over a $billion in life insurance money is still unclaimed. Some of that money is still sitting at the insurance company because no one has come forward to claim it. Some of that money has been turned over to the states unclaimed property divisions. Those policies are not paying out because the family does not know that they exist.
You need life insurance. When you get life insurance tell your beneficiary that there is a policy. Make a will and name an executor. Your executor needs to know: 1) that they will be the executor and 2) where to go to find the will, insurance policies, deeds, financial statements, brokerage accounts, bank account statements, etc. There also needs to be a contingent beneficiary. A contingent beneficiary will get the insurance if the primary beneficiary dies first or at the same time as the insured. Often with a married couple the spouse is the primary beneficiary. If the two die in a car crash together (for example) that policy pays out to the contingent beneficiary (if there is one) or the estate if there is not. The contingent beneficiary needs to know that there is a policy and that they are the contingent beneficiary. Likewise the person who will be your executor needs to know that a policy exists. Supply the insurance company with contact information for your beneficiaries and make sure that the information stays current. When a beneficiary dies contact your insurance company to change the beneficiary. Keep both the primary and the contingent beneficiary information on your policy up to date. Insurance is at the heart of any good estate plan and your estate planner should know about any policies that you purchase. Americans live longer than ever and often a period of diminished capacity precedes death. Most of us won’t know when we will die and likely will not be at our best for some time preceding our deaths. Do not delay getting your financial affairs in order.
If you think that a deceased relative may have left insurance that you are entitled to, contact their insurance agent, the insurance company, or your state’s insurance commissioner. Most state insurance commissions have a searchable database for unclaimed insurance policies. In Alabama, the unclaimed property division at the Secretary of State’s office holds unclaimed insurance and other assets of the deceased. You can also go to: www.unclaimed.org to search the database of the National Association of Unclaimed Property Administrators.