Unclaimed Life Insurance: What Happens To It & How To Find It

Every year, millions of dollars in life insurance benefits goes unclaimed across Australia. Many families don’t know they’re entitled to these funds after a loved one passes away. Here, we’ll cover everything you need to know about how to find unclaimed Life Insurance policies that have been forgotten or lost.

What is unclaimed life insurance?

When someone with a policy passes away, but no one claims the money, it becomes unclaimed life insurance. This happens when beneficiaries (the people meant to receive the money) don’t know about the policy, or the policy can’t be found.

According to the Australian Securities and Investments Commission (ASIC), around $2.3 billion in lost money is waiting to be claimed from bank accounts, investments, superannuation, and life insurance policies. That’s a lot of money that rightfully belongs to Australian families.

Why does life insurance go unclaimed?

Many Australians miss out on life insurance benefits they should receive. Let’s unpack some common reasons why:

• Policyholders pass away without informing the beneficiaries: Many people never tell their family members about their insurance or how to claim the benefits as Life Insurance beneficiaries. They may think they have plenty of time to do so or don’t want to raise anything upsetting with their loved ones until it becomes too late.
• Outdated or incorrect contact details: If you move house or change your phone number without telling your insurer, they can’t reach you or your beneficiaries. Insurance companies can only use the contact information they have on file.
• Lack of awareness about an existing policy: Some policies are taken out decades before a person dies, through a job or as part of their superannuation package. Some people might forget they hold a policy –  or not even know about it in the first place.
• Unclaimed funds held by financial institutions or government agencies: After trying several times to find beneficiaries, if they don’t have any success, insurance companies must transfer unclaimed money to government agencies. This money can sit with the government for years, waiting to be claimed.

How to check for unclaimed life insurance

If you’re wondering how to search for an unclaimed life insurance policy, here are some practical ways to start:

• Searching personal records: Start by looking through the deceased person’s papers, including mail, tax returns, bank statements, and any safe storage. Look for insurance premium payments, policy documents, or letters from insurance companies that might show an active policy.
• Checking with the Australian Securities and Investments Commission (ASIC): ASIC keeps a register of unclaimed money, including life insurance benefits. This national database collects information from many insurers and is a good place to start your search.
• Using other databases: Besides ASIC’s national register, each Australian state has its own unclaimed money database.
• Contacting life insurance providers:  Most insurance companies have staff dedicated to helping with unclaimed benefits inquiries. Contact them directly with as much information as possible about the policyholder. While they may be bound by privacy laws, if you are a legitimate beneficiary, you will be able to find out more about any benefit payments you are entitled to.

Steps to claim an unclaimed life insurance payout

Once you’ve found an unclaimed life insurance policy, here’s what you need to do to receive the benefit:

1. Identify the insurance provider: Find out which company issued the policy and whether they’re still operating under the same name.
2. Gather documents: Collect all necessary paperwork, including the original death certificate, ID documents showing your relationship to the deceased, and any policy information you’ve found. Having these documents ready when you contact the insurer will make the claims process much easier.
3. Contact the insurer: Get in touch with the insurance company’s claims department. Most insurers will ask you to fill out official claim forms and submit them with your supporting documents.
4. Wait for verification: After submission, the insurer will check your claim against their records and process the payment. This usually takes between 30 to 60 days but might take longer for older or more complicated policies.

What happens if an insurer no longer exists?

When insurance companies merge or close, their policies don’t just disappear – they’re usually transferred to another entity. To find out what happens to unclaimed Life Insurance when the original provider is gone, start by researching the company’s history through ASIC or industry publications.

If you can’t find a lead, the Life Insurance Code of Practice provides guidelines for these situations. This industry code, monitored by the Australian Financial Complaints Authority (AFCA), sets standards for how insurers should keep records and handle policy transfers.

How long do you have to claim life insurance?

Life insurance policies generally don’t have a strict deadline for making claims – but the process gets more complicated the longer a policy remains unclaimed. Some insurance contracts say that benefits should be claimed within a “reasonable time period” after death.

However, after about seven years of inactivity, insurers must transfer unclaimed benefits to ASIC or state government funds. If this happens, you’ll need to deal with those agencies instead of the insurance company, which may add extra steps to the recovery process.

How to prevent life insurance from becoming unclaimed

Taking simple steps now can prevent your life insurance policy from becoming lost or unclaimed in the future. A little planning ensures your loved ones will receive the financial protection you intended:

• Keeping policy documents organised: Store all insurance paperwork in a safe but accessible place and tell a trusted person where to find these documents.
• Informing beneficiaries about the policy: Have a straightforward conversation with your beneficiaries about your life insurance policy. Tell them which company holds the policy, roughly how much the benefit is, and what steps they’ll need to take to make a claim.
• Updating contact details with insurers: Whenever you move house or change your phone number, make sure to tell your insurance company. That way, they can reach you with important policy information.
• Reviewing policies regularly: Schedule a yearly review of your life insurance coverage to make sure it still meets your needs, and that all information is up to date.

FAQs about unclaimed life insurance

How do I know if a deceased relative had life insurance?

Start by searching the deceased’s personal papers, mail and financial records for policy documents. Check old bank statements for regular payments to insurance companies. If you don’t find anything, contact their former employers, as some provide life insurance as a work benefit. Finally, use ASIC’s unclaimed money search tool and consider contacting major Australian life insurers.

Can I claim life insurance if I was not named as a beneficiary?

Usually, only named beneficiaries can receive life insurance benefits. However, you may have valid grounds to make a claim if the policy names “the estate” as beneficiary and you’re the legal heir or estate executor, or if there is some uncertainty about the proper beneficiary.

What happens if no one claims a life insurance payout?

When life insurance benefits are unclaimed, the insurer will try to find beneficiaries using the contact information it has. If this doesn’t work, the benefits will eventually be transferred to ASIC or a state government agency as unclaimed money. This remains available for legitimate claimants to search for and recover indefinitely.

Is there a fee to search for unclaimed life insurance money?

No, searching government databases for unclaimed life insurance is completely free. You can access ASIC’s unclaimed money register and similar state government resources can be accessed without any charges.

Can life insurance policies be claimed after many years?

Yes, there is no strict time limit for claiming life insurance benefits. While older claims may need more documentation and verification, legitimate beneficiaries can successfully claim benefits even decades after the policyholder’s death.

Award-winning life insurance

Making sure your life insurance is easy to claim is just as important as having a policy in the first place. NobleOak offers award-winning life insurance that provides clarity and transparency, helping to prevent confusion for your beneficiaries.

Get a quote today or use our insurance calculator to find a policy that works for you.

Any financial product advice is general in nature only and does not take into account your individual circumstances, objectives, financial situation, or needs. Before acting on it, please consider the appropriateness of the information, having regard to those factors. Any third party websites or tools referred to are subject to their own terms and conditions and NobleOak Life Limited makes no representation or warranty as to any information on those websites. Persons deciding whether to acquire or continue to hold life insurance issued by NobleOak Life Limited should consider the relevant Product Disclosure Statement and Target Market Determination for the product. NobleOak Life Limited ABN 85 087 648 708 AFSL 247302.