Over $13 billion has already been recovered from unclaimed life insurance policies. See if you're owed money

Billions of dollars in life insurance benefits go unclaimed each year because beneficiaries don't know they're listed on a policy or can't find proper documentation to prove their eligibility.  

The National Conference of Insurance Legislators has standardized procedures for locating unclaimed policies and now requires insurers to periodically check the Social Security Administration's Death Master File to identify deceased policyholders and their beneficiaries.

It's not foolproof, though, and many policies slip through the cracks. But there are several ways to see if you're missing life insurance or annuity payouts that are owed to you.

Finding unclaimed life insurance policies

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If you know who named you as a beneficiary and which insurer they had a policy with, start there. If not, reviewing financial paperwork, like income tax returns and bank records, may provide clues. (A policy could even be stored in a safe deposit box.)

If your loved one was employed when they died, their company's HR department may be able to tell you if they had any group life insurance or supplemental insurance.

Friends, family, coworkers, previous employers and even clergy can also be a useful resource — or at least lead you to lawyers, accountants or other professionals with relevant information. 

Finding a lost life insurance policy can be a good motivator to decide if you need coverage yourself. We recommend Guardian as a standout for its affordability, flexibility and high financial strength rating.

The National Association of Insurance Commissioners (NAIC) website offers an online form that anyone who believes they may be a beneficiary of an unclaimed life insurance policy can fill out.  According to the NAIC, the locator has matched consumers with more than $13 billion in benefits since 2016.

You must have the suspected policyholder's legal name, Social Security number and dates of birth and death.

Information submitted to the NAIC is sent to participating insurance companies, which search their records for open policies — a process that can take several months.  

Another option for finding lost policies is Citizens Life Group, which helps seniors sell their life insurance on the secondary market.

In addition to providing visitors with state-specific links, progress tracking, and a printable checklist, the Citizens' website lists insurance company mergers, acquisitions, and name changes, so you can track down policies that may have slipped through the cracks.

Life insurance companies use Social Security Administration records to determine if a policyholder is deceased. They search for beneficiaries, too, but the funds are declared unclaimed, or "dormant," if they're unsuccessful.  

Each state has different rules on how long a policy must remain unclaimed before it's considered dormant, though it's typically between three and five years. (In Arizona and North Dakota, the dormancy period is one year.)

If it's been that long, you can search for unclaimed funds in the state where the deceased last resided or where they bought their policy.

Annuities can guarantee income in retirement

The National Association of Unclaimed Property Administrators' Missing Money site allows you to search multiple state databases for unclaimed funds at the same time — not just for insurance payouts, but money from utility companies, retailers and others. It's a free service, and users can begin the claims process instantly.

A number of state insurance departments — including Illinois, Louisiana, Michigan, New York, North Carolina, and Oregon. — have search tools to help locate lost policies registered in that state. Several life insurance companies have online search tools, as well, including John Hancock, MetLife and New York Life.

If you think you may be the beneficiary of a U.S. veteran's life insurance policy, you can contact the Office of Servicemembers' Group Life Insurance at 800-419-1473 or the VA Insurance Center at 800-669-8477.

The MIB Group, an insurance membership group with some 420 participating companies, has records of life insurance applications dating back to 1996.

For a $75 fee, you can submit a request to MIB's Policy Locator Service to find out where an individual applied for insurance. It's not a guarantee they took out a policy, but it's a good start.

If you discover you are the beneficiary of a life insurance policy, you'll have to file a claim to receive payment. You'll need several copies of the person's death certificate, available from the vital records office of the state where the person died.

You can either work with an insurance agent to contact the insurer or do it yourself. In addition to the death certificate, you'll need to provide identification and details about yourself to complete the claim form before you submit it online or through the mail.

You'll also need to choose how you want to receive your benefits — in most cases, either as a lump sum or as an annuity paid out regularly from an invested account.

There's no deadline to file a life insurance claim, but the faster you do it, the sooner you'll get a payout.

If you don't want your policy to go unclaimed, inform your beneficiaries they've been named in the policy and share the insurance company's contact information and your policy number.

At the same time, make sure your insurer has your beneficiaries' current address and contact information.

Keep copies of your policy and other important financial records (including any estate-planning documents) in an organized file that a member of your household knows the location of. You may want to keep a duplicate file outside of your home in case of fire or other disaster.

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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every life insurance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of life insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best life insurance.

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