You Have Life Insurance… But Could Your Family Find It?

If something happened to you tomorrow, would the people you love know where to find your life insurance policy?

Not just whether you have life insurance.

Would they know the insurance company? Would they know the policy number? Would they know who to call?

Imagine your family trying to piece all of that together during a time when the last thing they should have to worry about is paperwork.

And this happens more than you might think.

Since 2016, the National Association of Insurance Commissioners says its free policy locator has helped connect consumers with more than $13 billion in life insurance and annuity benefits. 

That's why having life insurance is only part of the planning.

You also want to make sure the people you've put that protection in place for can actually find it.

How Does a Life Insurance Policy Get Lost?

Think about how much can change over 20 or 30 years.

Maybe you bought a policy 25 years ago and put the paperwork in a filing cabinet.

Maybe the insurance company changed names or merged with another company.

Maybe you changed jobs and had coverage through an old employer.

Or maybe one spouse has always handled the finances, while the other simply knows that "we have life insurance somewhere."

Over the years, paperwork, companies, advisors, jobs, and your own financial situation can all change.

The good news is that this is largely an organizational problem, and it's something you can address before your family ever has to deal with it.

Start With a Simple Life Insurance Inventory

This doesn't need to be a 20-page document.

For each policy, start by recording a few basic pieces of information:

• The insurance company

• Policy number

• Policy owner

• Person insured

• What the policy is intended to accomplish

• Primary and contingent beneficiaries

  
  

That last one is particularly important.

Maybe you selected your beneficiaries when your children were young. Since then, there may have been a marriage, divorce, birth, death, or another major change.

The goal isn't to make changes simply for the sake of making changes. It's to make sure the information on file is still current and consistent with what you actually want today.  

Someone Else Needs to Know Where It Is

Creating an inventory doesn't do much good if you're the only person who knows it exists.

That doesn't mean leaving your policy numbers and personal financial information sitting on the kitchen counter.

Keep the information secure.

But your spouse, executor, trustee, adult child, advisor, or another appropriate trusted person should know where to find it if something happens to you.

Think about the alternative.

Your family is going through drawers, searching old emails, checking bank statements, calling former employers, and trying to remember the name of an insurance company you mentioned years ago.

And they're doing all of this while grieving.

That's a burden you can help them avoid today.

What If Your Family Can't Find the Policy?

There is a backup.

The National Association of Insurance Commissioners offers a free Life Insurance Policy Locator for policies and annuity contracts belonging to someone who has died.

A beneficiary or legal representative can submit information about the deceased person. Participating insurance companies can then search their records for a potential match.

If an insurer finds a policy and determines the person making the request is the beneficiary, the insurance company can contact that person directly.

But I wouldn't rely on this as your plan.

The NAIC says a search can take 90 business days or more, and submitting a request doesn't guarantee that a policy will be found or that a benefit will be payable.

Think of the locator as a valuable backup.

Not Plan A. 

Depending on the circumstances, matured insurance proceeds can also eventually become unclaimed property. Official state unclaimed-property programs can provide another avenue for searching.

Ask Yourself One Question

Instead of only asking:

"Do I have life insurance?"

Ask: "Could my family find it?"

Take a few minutes to create an inventory of your policies. Confirm the insurance company and policy information. Review your primary and contingent beneficiaries. Keep everything somewhere secure. And make sure at least one appropriate trusted person knows where to find it.

Because life insurance is something you put in place to make a difficult time a little easier for the people you care about.

Making sure they can actually find it is part of that planning. 

Registered Representative of, Securities and investment advisory services offered through Hornor, Townsend & Kent, LLC. Registered Investment Adviser. Member FINRA/SIPC.  800-873-7637, www.htk.com. HTK does not offer tax or legal advice.

 Caserta & de Jongh, LLC is unaffiliated with HTK.

For Educational Purposes Only - Not to be relied upon as financial, tax, or legal advice. 

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