How to find out if someone has life insurance
A life insurance payout can make things a little easier at a very difficult time. But what if you don’t know who your loved one’s policy was with or if they had one at all? This guide helps a would-be beneficiary track down a life insurance policy when someone close has passed away.
Tracing a potential life insurance policy
When a loved one passes away, a life insurance payout can make a big difference. If you don’t know if they had life insurance, or who it was with, it’s well worth spending some time to check.
Here’s what to keep in mind:
- Life insurance companies don’t proactively contact beneficiaries and might not even know a policyholder has died. It’s up to the beneficiary or the estate executor to contact the insurer and make a claim.
- There are ways of finding lost life insurance, even if you have no details at all or the company has since merged, changed its name or closed.
- You can make a claim at any time after a loved one dies – there’s no time limit whatsoever. So you can wait until you’re ready.
- If the life insurer has failed by the time you find the life insurance policy you could still receive all or most of the payout.
When a life insurance policyholder dies during their policy term and the beneficiary doesn’t make a claim, the policy is said to be lost or unclaimed.
A surprising number of life insurance policies go unclaimed – there’s thought to be at least £2bn in the UK that hasn’t been paid out. And this means far too many people miss out on life insurance benefits that they’re due from unclaimed policies.
Why is life insurance sometimes unclaimed?
There are lots of reasons a life insurance policy might not be claimed. For example, it could be that:
- The beneficiary or executor of the will doesn’t know the policy exists or can’t find any details.
- The beneficiary has died before the policyholder.
- The insurance company has changed its name, closed or merged with another company.
- The life insurance company can’t inform the beneficiaries as their contact details are out of date, for example because they’ve moved house or changed their name.
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Why is it important to check for a life insurance policy?
It’s especially important as the onus isn’t on the life insurance company to proactively contact the beneficiary. They may not even know the policyholder has passed away. Although some insurers do search the death register to identify deceased policyholders, they’re not required to. So you can’t rely on this happening.
If there’s a will, it’s generally down to the executor to check if there are any active life insurance policies and let the insurer know. But if there isn’t a will, or the executor doesn’t have details, potential beneficiaries like close family members will need to get involved. It will be your job to identify a lost life insurance policy, notify the insurer and begin a claim.
Is there a time limit for claiming a life insurance payout?
Of course, the sooner you claim, the sooner you’ll benefit from the payout. But you may not feel ready to do this for a while – especially if you need to do a bit of detective work to track down a lost life insurance policy.
Luckily, there’s no time limit whatsoever for claiming on a life insurance policy, so you can take all the time you need. If you come across an unclaimed life insurance policy even many years later, you can still make a claim.
What happens to unclaimed life insurance money?
If 15 years has passed and a policy still hasn’t been claimed, the money becomes part of the government’s Dormant Assets Scheme and will go to charity. So any unclaimed life insurance money does go to a good cause even if the beneficiary hasn’t claimed it.
It’s important to know that you can still claim on the policy and get a payout even after this has happened. It might just take a little longer.
When someone passes away in England and Wales and their estate isn’t claimed, it’s held under Bona Vacantia rules and the assets are moved to the government’s Bona Vacantia department. It’s slightly different in Scotland.
If your loved one has passed away and you don’t know if they have a life insurance policy, don’t just leave it and potentially miss out on what you’re due.
Here’s a guide to the steps you can take when finding lost life insurance:
Step one: Have a look through their files – digital and paper. You might find life insurance policy documents filed with other paperwork and records.
Step two: Go through their bank statements. Can you see any payments to insurance companies? Don’t forget to check credit card statements, too. Remember, premiums can be paid monthly or annually, so go back at least a year. When you check bank statements be aware that a direct debit payment reference may match the life insurance policy number.
Step three: Check with their professional advisers. Did they have a financial adviser, an accountant or a lawyer? They might be able to help point you in the right direction.
Step four: Get in touch with current or past employers. If your loved one had a job, they might have had life insurance or death-in-service benefit through their work.
Step five: Speak to their friends and other family members. They could have mentioned a life insurance policy to someone else.
Step six: Contact an insurance company or bank directly. Don’t be afraid to get in touch and ask them if they have a record of any policies. Banks often offer products like life insurance to their customers.
There are also companies that can help you track down a policy and find unclaimed assets, but there’s a cost for their services and they can’t guarantee that you’ll get a result.
Once you think you have the name of the provider, you should be able to find them on the Association of British Insurers’ searchable member database. You can then get in touch with the insurance company to start your claim.
However, over the years companies do change names, merge, get taken over or fail. Don’t worry – even if this is the case, there are still ways to track them down.
Tracing friendly and mutual societies
Particularly popular in the 19th and 20th century, lots of mutual and friendly societies have since gone through mergers and demutualisation. But there are still ways to find them.
- Check out the Association of Financial Mutuals’ Tracing a Society page to find a list of its members, as well as a register of closed societies.
- Search the Financial Conduct Authority’s Mutuals Public Register for a list of closed and current mutual societies.
What to do if the insurer has failed
If you think the insurance provider might have failed, the Financial Services Compensation Scheme (FSCS) could be able to help. The government set up this scheme to help people whose financial services provider has failed.
You can visit the FSCS website and search for the company name. If the insurer is on their list, you might be able to get compensation from the scheme. Depending on when the insurer failed you could receive either 90% or 100% of the claim value.
Once you’ve gone through the process of finding lost life insurance and discovered that there is a policy, here’s how to make a claim.
- Collect all the documents you’ll need to send to the insurance company. These will include things like the death certificate, the life insurance policy number, and any relevant medical information on the cause of death.
Note: If you don’t have any policy details except the provider’s name, they’ll still be able to trace the policy. You’ll need to give them information like the name, address and date of birth of the person who has passed away.
- Contact the life insurance company to tell them about your loved one’s passing and begin the claim. Anyone can do this, but it can only be paid to the beneficiary.
- Your insurance provider will send a claim form to you or the estate executor. Complete it and send it back to the insurer with any relevant documents required. You can normally do this online or by post.
The insurance company will guide you through the process and help make sure you get things right.
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How is life insurance paid out to beneficiaries?
If the payout is approved, you’ll get a lump sum payment paid in Sterling to a valid UK bank account. There’s no set timing for how long this will take.
What happens to the payout depends on the type of policy:
- If the policy wasn’t written into trust, the payout will form part of the deceased person’s estate, and the executor will then distribute the money in line with the deceased person's wishes.
- If the policy was written into trust, it won’t be subject to inheritance tax or form part of the estate, and will go to the named beneficiary.
- If the life insurance policy was a joint policy with another person, the payout goes to the surviving partner.
Related reading: How long does it take for life insurance to pay out?
Making sure your life insurance policy doesn’t become lost
Financial pressures make things worse at a very difficult time, so having a life insurance payout can make a big difference when someone close dies. And having all the details readily to hand makes life easier for your loved ones at this time.
Here’s how to make sure your policy doesn’t get lost:
- Tell people! This is the easiest and best solution. Let the beneficiary, other close family members and the executor of your will know that you have a policy – and where to find the details.
- Make sure the policy information is easy to find. It’s a good idea to set up a file with all your important documents and tell people where it is.
- Keep your provider up to date with any changes, like a house move or name change.
- Don’t miss any premiums. This can invalidate your life insurance policy and mean it won’t pay out.
Disclaimer: This information is general and what is best for you will depend on your personal circumstances. Please speak with a financial adviser or do your own research before making a decision.
Frequently Asked Questions
How do you know if you’re the beneficiary?
If you know there’s a policy, but you’re not sure if you’re the beneficiary, first try contacting the executor of the will, if there is one. They or the estate’s administrator can contact the insurer to confirm who the beneficiary is.
You can also get in touch directly with the insurer. They may ask for some information, like proof of identification before they speak to you.
Does a life insurer automatically contact beneficiaries after a death?
No. It’s up to the beneficiary or executor to contact the insurer. Although some providers have started to search the death register to identify possible policyholders, this isn’t something you can rely on.
How quickly can you claim life insurance after a loved one has died?
You can start your life insurance claim as soon as you’re ready after your loved one has passed away. And remember that there’s no time limit – so you can choose to claim on day 1 or day 1,000.
Do you have to pay tax on a life insurance payout?
A life insurance payment is normally tax-free so a beneficiary will not be liable for income tax or capital gains tax, but in some cases they could be subject to inheritance tax (IHT). This is because life insurance payments are considered part of your estate and count towards your IHT threshold. Getting a policy written into trust avoids this.