What is an unclaimed life insurance policy?

Key takeaways

• Unclaimed life insurance is money that may be owed but hasn’t been claimed. However, finding a policy doesn’t guarantee a payout, as the cover may have ended or the money may already have been paid

• There are several ways to trace a lost policy. Check bank statements, emails and financial paperwork, contact the deceased’s adviser or former employer, or use a tracing service such as Unclaimed Assets UK

• You may need to prove your entitlement to claim. Insurers can ask for identification, a death certificate and evidence that you’re a beneficiary, executor, administrator or trustee

• It may still be possible to claim years later. Eligible proceeds can enter the Dormant Assets Scheme if legal conditions are met, but the money isn’t automatically lost

What is an unclaimed life insurance policy?

An unclaimed life insurance policy is one where a payout may be due following the policyholder’s death, but the person entitled to receive the money hasn’t made a claim or hasn’t been identified or traced.

However, finding evidence of a policy doesn’t guarantee a payout, as the cover may have ended or the policy may already have paid out.

Life insurance is a type of insurance policy that provides people named on the policy – beneficiaries – with a cash lump sum in the event of the policyholder’s death.

When someone dies, the executor of the will is usually responsible for checking for any life insurance policies in place. They will do this as part of gathering information on the value of the person’s estate.

If the person does not have a will, the administrator of the estate will usually be the closest living relative. However, other family members and potential beneficiaries, such as cohabiting partners, can also investigate whether any life insurance exists.

Why do life insurance policies go unclaimed?

Life insurance payouts might go unclaimed for several reasons, such as:

• The insurance company doesn’t know the policyholder has died

Normally the insurer will be informed of the death by the beneficiaries of the life insurance policy or the executors of the person’s will. Alternatively, the life insurance company may make inquiries if policy premiums stop being paid – for example, if the policyholder’s bank account has been closed after their death.

• Communication gaps between policyholders and beneficiaries

Policyholders often fail to inform their beneficiaries about the life insurance policy. This results in beneficiaries being unaware of their entitlement when the policyholder dies.

• Difficulty tracing beneficiaries

Sometimes the life insurer does not have up-to-date contact details for the beneficiaries.

• Death of the beneficiaries

In some instances, the beneficiaries of a life insurance policy may die before the policyholder.

How do you find out if someone had a life insurance policy?

If you think someone who has died had life insurance but can’t find the paperwork, there are several ways to investigate.

• Check bank statements and paperwork

Look through the deceased person’s bank and credit-card statements for payments to an insurer or insurance broker. Check their emails, filing cabinets and other financial paperwork for policy documents, renewal letters or correspondence about cover.

Some people keep a file of important documents for their family, including their will, insurance policies and details of their financial accounts. However, the absence of paperwork or recent payments doesn’t necessarily mean a policy never existed.

• Contact their financial adviser or a known insurer

If the person used a financial adviser or insurance broker, ask whether they arranged life insurance. You can also contact an insurer if you know which company provided the cover. You’ll need to explain your relationship to the deceased and may be asked to provide evidence of your authority to make enquiries.

If you don’t know the provider, the Association of British Insurers (ABI) recommends checking bank and credit card statements or contacting Unclaimed Assets UK. If the insurer has changed its name, Policy Detective may help you trace the company.

• Check for workplace life insurance

Contact the deceased person’s former employer to ask whether they had life insurance through their workplace. Some employers provide death in service benefits, which can pay a lump sum if an employee dies while covered by the scheme. The employer or scheme administrator can explain whether cover existed and how to make an enquiry.

• What if you still can’t find the policy?

A tracing service may help you locate a lost policy or identify a provider. Check what each service covers before applying, as some services focus on finding your own lost assets and may not accept searches on behalf of someone who has died.

Finding evidence of a policy doesn’t guarantee that a payout is due. The policy may have lapsed, ended or paid out already, so the insurer or relevant scheme will need to confirm whether cover existed and whether any benefits remain payable.

What information should I gather before searching for a policy?

Before searching for a life insurance policy, gather as much information as possible about the deceased and your right to make an enquiry. This may include:

• The policyholder’s full name – including any previous names

• Policy number – if you have it

• Date of birth and date of death – to help identify the correct person

• Death certificate – you may need to provide a copy

• Your relationship to the deceased – and any evidence that you are a beneficiary, executor or administrator of their estate

You can start a search without all these details, but having them to hand may make tracing a policy easier. The documents and information required will vary between insurers and depend on the policy and your role.

What if the insurer has changed name, merged or no longer trades?

Search for the insurer’s old name online to find out whether it was taken over or renamed. The Financial Conduct Authority’s Financial Services Register can help identify current and former firms.

If the insurer has stopped trading, check whether another company took over its policies and, for some types of insurance, whether the Financial Services Compensation Scheme can help. Keep any old policy numbers, letters or payment records, as these can make tracing the policy much easier.

What happens to an unclaimed life insurance policy?

Initially, any money due from an unclaimed life insurance policy remains with the insurer. If it knows the policyholder has died, the insurer may try to trace the beneficiaries using the contact details it holds or external tracing services.

There’s no universal deadline for claiming life insurance money. If a payout is due, it may still be possible to claim it years later. Insurers also don’t have to transfer unclaimed proceeds to the government-backed Dormant Assets Scheme after a set number of years, as joining the scheme is voluntary.

However, eligible long-term insurance proceeds can be transferred to the scheme once the legal conditions are met. One route to dormancy is when at least seven years have passed since the insurer was notified of the policyholder’s death, with no communication from the owner, their representative or the estate administrator.

Money transferred to the scheme goes to a reclaim fund, which keeps enough to meet expected claims. Any surplus can be used to support good causes across the UK. The money isn’t lost, though – eligible claimants can still reclaim what they’re entitled to, even after the transfer.

Who can contact an insurer about someone else’s policy?

If the policyholder has died, a beneficiary, executor or administrator of their estate may be able to contact the insurer, depending on the policy and their role. If the policy is held in trust, the trustees may need to make the enquiry. Other relatives can try to trace a policy, but being related to the deceased doesn’t automatically entitle them to access policy details or claim the money.

The insurer or tracing service may ask for identification, a death certificate and evidence of your authority, such as probate or letters of administration. Requirements vary, so check what’s needed before starting your search.

How do you make a claim once a policy is found?

Once you’ve traced a life insurance policy, contact the insurer to find out whether any money is still payable and how to make a claim. The process will depend on the policy and your relationship to the deceased.

Before contacting the insurer, gather:

• The policyholder’s details – their full name, date of birth, date of death and any previous addresses

• Policy documents – including the policy number, if available

• Proof of identity – for yourself and, if requested, the deceased

• The death certificate – to confirm the policyholder has died

• Proof of your entitlement – such as evidence that you’re a named beneficiary, or probate or letters of administration if you’re handling the estate

Explain your relationship to the policyholder and whether you’re contacting the insurer as a beneficiary, executor, administrator or trustee. The insurer will tell you what evidence it needs and whether you’re entitled to receive information or make a claim.

If the policy was written in trust, the trustees will usually handle the claim. If the proceeds form part of the deceased’s estate, the executor or administrator may need to deal with the claim as part of the estate administration process.

If you can’t find the original policy documents, don’t assume you can’t make a claim. Contact the insurer with the information you have and ask what to do next. Requirements vary, and finding a policy doesn’t guarantee that a payout is due.