It might surprise you to learn that life insurance benefits sometimes go unclaimed. While it is already a tragedy to experience a death of a loved one, survivors not receiving the financial benefit of a life insurance policy is another unfortunate occurrence. Here are some tips to ensure your beneficiaries receive the benefits to which they are entitled.
Tip #1: Keep your contact information up to date with your insurer.
While this may seem like common sense, it’s easy to forget to notify an insurer of an address or phone number change on a policy purchased years ago. However, the insurer’s main method of contacting you about your policy is through the information you provide. Be sure to update your contact information (including your address, phone number, and email address) with every change. Keep in mind that the post office only offers forwarding services for a year after a move – and only if you ask to set up mail forwarding.
Further, it’s not only important that your own address is updated as the owner of a policy, but you will also want to provide up-to-date contact information for the insured (if it’s another individual) and your beneficiaries. This way, the insurer has everything they need to reach out to any party involved in the policy after receiving report of a death.
Tip #2: Give your beneficiaries your insurer’s information.
Beneficiaries are likely going to be the ones informing the life insurance company of a death, so they need to know who to contact and when.
If the policy owner passes away, premium payments may stop being made toward the policy. However, the fact that payments on a policy stop is not enough for an insurance company to know that the policy owner has passed away. Some life insurance companies may assume that the stopped payments indicate the policy owner no longer wishes to keep the policy in force, which could result in the policy lapsing before the death of the insured or the end of the policy’s term. In some cases, a policy may be paid up and not require additional premium payments. In both situations, however, a new policy owner needs to be named.
If the insured passes away, beneficiaries are generally the ones who report the death and initiate claims for the death benefit. Providing your beneficiaries with the name and phone number of your insurer, as well as the policy number of your life insurance policy, helps ensure that the claims process will operate smoothly.
Tip #3: Let your beneficiaries know that they are beneficiaries.
The idea of a beneficiary receiving a surprise life insurance benefit may seem like something out of a gothic novel. While this notion can be romantic in fiction, in reality it can bring complications. Unaware beneficiaries don’t know to reach out and claim the benefits to which they are entitled. Unaware beneficiaries also do not know to report the death of a policy owner to the life insurance company. Be sure to let your beneficiaries (or their parents or guardians) know that they are beneficiaries of your life insurance policy.
Tip #4: Keep your beneficiaries’ information complete and up to date.
Just as important as keeping your contact information up to date, it’s important to keep your beneficiaries’ information complete and up to date with your insurer. Sometimes, policies have insufficient or even incorrect details about a policy’s beneficiaries, which can make it hard for an insurance company to find them after the insured’s death. While many insurance companies will attempt to locate beneficiaries, the benefits of beneficiaries who cannot be found are eventually turned over to the state and are no longer held by the insurer. Reclaiming unclaimed property from the state can be a nuisance. This is why it is vital to review your policy regularly, making sure that all your and your beneficiaries’ information is correct and up to date.
Navy Mutual works hard to locate beneficiaries when we become aware of the death of a policy owner. If you have any questions or want to update your or your beneficiaries’ information, please contact our customer service team by calling 800-628-6011 or emailing customerservice@navymutual.org.