Stumbling across a forgotten life insurance policy can be like finding a lottery ticket: It might be worthless, but it might also be an unexpected windfall. The only way to know for sure is to check on the policy number, to learn what type of policy it is and — more important — whether it remains open. There are several ways to do this.
The Standard Channels
If the name of the insurance company is on the policy, checking the policy number is pretty simple. Look up the company's website, and use the information on its Contact Us page to submit your inquiry. Usually, you'll have the option of using a toll-free number, an online form or email, or making your inquiry the old-fashioned way by traditional mail or dropping into a sales office in person.
Depending on the insurer and its operating policies, you may need to provide proof of your identity or other documentation. If the company that issued the policy is no longer in business, tracking down your policy becomes a bit more complicated. There's been a lot of consolidation in the industry over the past several decades, but if you type "who bought [X] insurance company" into your favorite search engine you should be able to track down which company currently holds the previous insurer's portfolio.
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If the policy is in your own name, you should only have to establish your identity before the company shares this information with you. If the policy was owned by a deceased person, it gets more complicated. If you're named as a beneficiary, or if you're the executor of the estate or hold a power of attorney, the insurer will likely require documentation of the insured person's death as well as your status. If the policy is owned by a family member who's still alive but not competent because of illness or injury, you'll only be able to request the policy details if you hold that person's power of attorney. It can be inconvenient, but the insurer has an obligation not to divulge policy details to anyone who doesn't have a legitimate reason for asking. In insurance terms that's referred to as having an "interest" in the policy.
Don't Get Excited Just Yet
The likelihood of a policy bringing you good financial news depends on what type of policy it is, and how it was paid. Term policies, for example, accumulate no cash values and usually only remain in force if payments are kept up. Unless the policy was prepaid in full, which is rare, a forgotten term policy usually lapses almost immediately if payments stop. Whole life policies, on the other hand, accumulate equity in much the same way as your home mortgage. When payments stop, insurers use that equity or "cash value' to make the payments, and keep the policy in force. If the policy is in your own name, that can mean you have a nice little unanticipated nest egg of accumulated cash value in the policy. If the policy was held by a deceased person, it would remain in force as long as the cash values were enough to keep up the payments. If you're the beneficiary, you'll still be entitled to the full death benefit, as well as any remaining cash values left in the policy at the time of death.
If You Don't Have the Number
If you believe there was a life insurance policy in place, but no longer have the policy number, you may still be able to track it down. Policies that accumulate equity often have to mail out IRS forms to report that income, for example, so you can locate them by working through your previous years' tax files. Policies obtained through work are often funded by payroll deductions, so old pay stubs or benefits brochures may put you on the right track. If you're trying to find policies that may have been held by a deceased person, follow the same steps, using their files. The insurance industry also has a national database of potentially lost policies you can search. Finding policy information without the policy number requires perseverance and a bit of detective work, but the potential payoff can be significant.