Because it is the job of beneficiaries to notify the life insurance company of a policy owner's death, more than one-quarter of all life insurance policy benefits go unclaimed. Family members often aren't aware a policy exists, or don't know how to track it down.
► A recent government audit found most life insurance companies make little effort to trace missing heirs, even when the policy holder is known to be deceased. New statutes enacted in 2012 require a more diligent search, but estimates are over one billion dollars in unpaid claims among the major underwriters.
Even so, missing heirs can be difficult to find, due to name changes after marriage or divorce, an unreported change of address or expired postal forwarding order after a move, and incomplete or illegible records.
► Policyholders may also be entitled to an unexpected windfall. As a growing number of mutual life insurance companies - including MetLife, John Hancock, Prudential and others - have converted to stock ownership, millions of current and former policyholders and heirs are entitled to receive stock and cash, in addition to policy benefits.
When John Hancock demutualized, it did not have current addresses for 400,000 policyholders. Prudential could not locate 1.2 million lost policyholders, and 60 million shares of MetLife stock arising from its demutualization went unclaimed. By law, unclaimed policy benefits and demutualization compensation are held in trust until claimants come forward.
► Even if your insurance company no longer exists, payments of up to $300,000 are possible from state insurance guaranty associations. If you have reason to believe a life insurance policy exists but have not received payment, complete the form below.