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Unclaimed Life Insurance Policies Funds: Resources and Tools

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Locating money from lost life insurance and demutualization can be hard; however, there are tools to help owners and heirs find these valuable assets.
Finding and claiming lost life insurance policies can be done using various methods. A State’s Missing Property Office may have some funds from unclaimed policies. However, there are no central depositories (federal or state) for these assets. A missing insurance policy is sometimes a problem confronted by legal heirs and beneficiaries who don’t know the company’s name in order to locate the policy.

Demutualization may be another source of unclaimed funds from life insurance policies. This is a corporate reorganization that converts policyholders into owners of stocks of the insurance company gone public. The conversion is done under the supervision and approval of regulators. Policyholders and heirs are entitled to shares of the newly issued stocks or to some other type of compensation.

Lost Life Insurance Policies: Locating Insurance Companies

The National Association of Insurance Commissioners, NAIC, maintains a database with links to each state’s insurance department. Each state’s department, in turn, has information on life insurance companies that have underwritten policies there. To use this service an heir searching for a lost insurance policy must know which company (or use a narrowed list of companies) insured the policyholder.

This information can be obtained by reviewing records from banks, credit cards, and payroll statements. Once the name of the insurance company is known, the state’s department can assist in contacting the company to search and claim missing insurance policy and other related funds.

The State’s Unclaimed Property Department

Like banks and other financial institutions, insurance companies must turn unclaimed funds to the state after a period of time. For life insurance companies, unclaimed policies belonging to a deceased person are returned to the state once the company knows the person is dead and can’t find a beneficiary.

To use this service, heirs should search in the State’s Office of Unclaimed Property. An heir looking for unclaimed life insurance policy using this method should know or have an idea in which state the policy was purchased. If the state’s name is not known, the heirs can look in every state using the National Association of Unclaimed Property Administration website.

Search for Missing Money from Life Insurance Demutualization

Many insurance companies that were previously owned by policyholders are now public companies owned by stockholders. These companies have completed the regulated process of demutualization. Each policyholder was issued a number of shares of stock of the reorganized company or was given other options. For policies not cashed out, the beneficiaries may be entitled to these shares. The shares are held on the books and records of the insurance companies.

Unclaimed shares from demutualization may be turned to the State’s Treasury, Comptroller, or Unclaimed Property Office. To find demutualized shares, the policyholder or heirs should contact the insurance company directly or search on the State’s Unclaimed Property Office database. Some of the larger insurance companies gone public include, John Hancock, MetLife, Mutual of America, Prudential Life, and Mutual of New York. The state where the company was organized will be the state holding any of the unclaimed funds. For income tax treatment of shares of stocks received from a demutualization consult IRS Topic 430.

Policyholders and heirs searching for unclaimed life insurance funds should try to contact the company directly for money not returned to the state yet. The Customer Service department will be the first contact for further assistance with policies related questions. Next, the State’s Unclaimed Property Office’s online database can be searched by name to find funds returned by insurance companies. Note that to use these search methods some research should be done to find details such as the company’s name and the state where the policy was issued.