Died With No Life Insurance
When a person dies not leaving any assets or life insurance, the family is left with funding the funeral costs. Unfortunately, this isn’t the end of financial woes for some families. There are many cases where the breadwinner husband or wife dies leaving behind an unemployed spouse, children, a mortgage and no life insurance.
These are daunting circumstances but before you jump to conclusions, you should always investigate if deceased did actually have a policy. With unclaimed policies worth billions of dollars in the U.S simply because beneficiaries weren’t aware of their existence, you may end up being surprised.
How to Find a Life Insurance Policy
First of all, the policy issuer should contact each beneficiary. They have the beneficiary’s name and social security number. However, the company is not always aware of the death. Also if a beneficiary is not contactable or has changed address, there are circumstances where the beneficiary will not be notified. Don’t wait around for a call. The more you know about the decedent’s financial circumstances the better.
Documents
Search through the deceased’s personal documentation. These are usually kept in a filing cabinet, in files or folders in a cupboard, in boxes or anywhere else the deceased stored personal information.
You are looking for any issue notices, insurance certificates, application forms, dividend notices, invoices, premium notices and checks in favor of a life insurance company in their book registry.
Financial Records
If you cannot find anything, try to search their bank statements or records to see if there have been payments resembling life insurance premiums.
Take a look at their income tax returns. If they had an investment policy, the interest income would be recorded. If they borrowed the cash value, the interest expense would also be noted. If you cannot locate copies of their tax return, contact their tax advisor or the IRS.
You may yet receive their next premium invoice in the mail, which will notify you of an active policy. Keep an eye out for incoming mail.
Employer
In the meantime, contact previous employers. Employees often purchase group life insurance through their employer.
Old Policies
If you found any policy statements or application forms while searching through documents, even if they are expired, see if there are other policies mentioned on the documentation. Insurance companies often require an applicant to list all other life policies when applying for life insurance. You may find that even though this policy was canceled, the previous one(s) have remained in force or have even been paid up.
Safety Deposit Box
Did they leave a safety deposit box at their bank? This may store personal information and documents.
Contacts:
- Contact their attorney and accountant to see if they left papers in safe custody.
- If the deceased had auto or house insurance, try the respective agent or the company. Many people keep their insurance with a single carrier.
- Ask the person’s relatives and friends. They may have discussed it with anyone.
- If some time has passed since the death, contact your local Department of Insurance to see if there are any unclaimed funds. Contact details can be found at www.naic.org. They will require your name, social security number and the insured’s name.
- If it’s been over one year since the death, the proceeds (if any) could be held by the state’s Unclaimed Property Office. Check the relevant state’s office. You can do this through the National Association of Unclaimed Property Administrators (NAUPA) by visiting www.unclaimed.org. Each state participates in NAUPA’s database collection of unclaimed property (which includes accounts in financial institutions and companies that have had no activity generated or contact with the owner for one year or a longer period, including life insurance policies). Claims can be made into perpetuity in most cases, even by heirs.
- You may also like to use MIB’s policy locator search (http://www.mibsolutions.com/lost-life-insurance/). For a fee, they can provide records any life insurance policies applied for by the decedent. Only certain persons can apply for the search. You will need the decedent’s name, date of birth, place of birth residence and any other names they used. You will also need an original death certificate with an official seal.
Searching for life insurance policies can be very tedious and time consuming. If you have a policy, remember to tell someone where the details can be found.
Not leaving any assets or even burial insurance can cause undue hardship on dependents and family members who are struggling to meet ends themselves.
Cases in the News where people have died with no life insurance, causing difficulties for family members:
- In 2009, a Marion Township woman, Christina DeNunzio lost her brother, mother and father all in the space of five months. The 29 year old had a nine month old daughter. Her family members did not have life insurance. She needed to pay for her father’s funeral expenses, quickly sell her parents’ home and their possessions and find employment to purchase an apartment for her and her child. She was lucky that her parents left some assets.
- In April, 2010 David McLaughlin, a logger, died leaving no life insurance and no estate. The logger was survived by two sons, 18 and 23, his sister, who was in financial turmoil herself and his girlfriend who had been very ill and hospitalized at the time. No one in the family had the funds to pay funeral expenses. They were forced to seek help from the public to assist paying the funeral costs, which was very upsetting for them.
- In May, 2010 Karen Wright lost her brother Steven Finlay. He did not have life insurance. Initially the funeral director told the sister they could arrange a payment plan. After taking possession of Mr Finlay’s body, the funeral director demanded $4,100 before they would go ahead with the arrangements. He had left the body to rot for 13 days to the stage where it had maggots and mold. The body was eventually transferred to another funeral home and buried. This is an unfortunate story that should not have happened.
- Actor Gary Coleman also left this world on 28 May 2010, leaving no money in his bank accounts. He was deemed uninsurable due to his kidney problems and therefore had no life insurance proceeds to fund the funeral. Before his will turned up naming an executor, his ex-wife and estranged parents were planning to plead with his friends to help out with the cost.
There are many more cases where the family members need to pull funds together to pay for end of life expenses that go unreported reported. This is why seniors have started purchasing burial insurance, to save their family the financial burden. People die on a daily basis and whether it’s your wife, husband, son, daughter, brother, sister or parent, any such death can cause difficulties for the surviving family members.
What can you do if there’s no will, no estate & no life insurance?
When somebody dies without leaving any savings, assets or insurance, there’s not much financial support. Family members often resort to pleading for assistance with the public or the deceased’s friends, club or church.
If the decedent person was a social security member, eligible persons may apply for the small lump sum Social Security Death Benefit of $255. No other government assistance is available to help with funeral costs.
Seek quotes from a number of funeral homes and try to negotiate a payment plan.
If the deceased had bank accounts even with a small sum, contact the bank to ask their requirements for having this amount released. Usually, they will require the death certificate, a copy of the will and a signature from the executor. If it’s a joint account, the money can be withdrawn immediately by the surviving account holder.
If the deceased was employed, contact the employer to see if they are entitled to severance pay or if they had any accumulated leave pay. As discussed above, they may have also had group life insurance.
In these difficult times, it’s important for family members to comfort and assist one another.