Life insurance can be an incredible way to provide your loved ones with financial protection. However, policyholders may forget to notify loved ones of their beneficiary status. As a result, you may not realize you’re entitled to claim a death benefit payout after the policyholder passes away. This article will explain how life insurance and beneficiaries work, how to see if you’re a beneficiary, and discuss what happens if a policyholder doesn’t name any beneficiaries.
Life insurance is a contract where a policyholder pays monthly or yearly premiums, and, in exchange, the insurer promises to pay a death benefit to the policyholder’s beneficiaries.1 This death benefit can be used for many purposes, such as replacing your income, paying off debts, funding children’s college, and saving for emergencies.
Term life insurance policies typically last for a fixed period of 10 to 30 years, meaning you may outlive your policy. However, premiums are low relative to the coverage offered. Permanent life insurance policies, such as whole life insurance, often also have a cash value growth component that is funded by premiums and grows tax-deferred. You can usually borrow against or withdraw from this policy when it grows large enough.
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Life insurance beneficiaries are the individuals or organizations that you can designate to receive the death benefit payout when you pass away. You can name individuals, such as loved ones, or certain charities and trusts as beneficiaries. You can also name one or more beneficiaries.
Additionally, policyholders can name contingent beneficiaries. These are backup beneficiaries that can receive the death benefit if the primary beneficiaries become unable to do so, such as if they pass away.1
Here’s how to find out if you’re a beneficiary on a life insurance policy:
The easiest way to learn if you are a life insurance beneficiary is to talk to the policyholder if they are still alive. They can tell you whether you’re a beneficiary and provide information necessary to claim the death benefit when they pass away.
If the policyholder passes away before you can ask them, they may have left policy information in paperwork, such as:
If you believe you’re a beneficiary and know which life insurance company your loved one held their policy with, contact the insurer. You may need the following information:
Life insurance policy locator services help potential beneficiaries track down lost policies and find out who the beneficiaries are. Start with the Life Insurance Policy Locator from the National Association of Insurance Commissioners (NAIC).2 This is the most well-known policy locator and is recommended by many state governments.
Each state’s government maintains an unclaimed property division for unclaimed property, including life insurance death benefits. The policyholder’s state’s unclaimed property division might possess the death benefit payout if the policyholder didn’t designate beneficiaries. If this is the case, it’s wise to contact their state.
Once you confirm that you’re a life insurance beneficiary, here’s how you can file a claim to get your death benefit:
1. Contact the insurance company: Reach out to the insurer and inform them that the policyholder has passed away. The insurer will tell you how to file a claim and what documentation you’ll need.
2. Gather documentation: Follow the insurer's instructions regarding documentation. That may include a copy of their death certificate and other information to confirm the identity of yourself and the policyholder.
3. File the claim: Submit your claim to the insurer with your documentation. Follow all instructions carefully to minimize errors and the chance of being denied.
4. Receive the death benefit: If the insurer approves your claim, they will pay you the death benefit amount. The amount you receive and how you receive it, such as installments or a lump sum, may vary by policy type and coverage amount.
Death benefits are generally tax-free regarding income taxes. Therefore, you may not owe taxes on the amount you receive. However, speaking with a financial advisor when you receive any type of windfall, such as a death benefit, is always a good idea.
Naming beneficiaries is vital to ensuring a life insurance policy pays out according to the policyholder’s wishes. Otherwise, the policyholder’s estate may receive the death benefit. If the policyholder has a will, this may determine how assets are distributed. However, the death benefit payout may have to go through a probate process, which can be costly and take a long time. This may leave the estate and heirs with less money.
Taking steps to find out if you’re a beneficiary before a policyholder passes away can be extremely helpful. But luckily, there are still ways to find out after the policyholder’s passing. Following the steps above can help you learn if you’re a beneficiary and, if you are, claim your death benefit proceeds to create financial security for yourself and your family.
Getting your own life insurance policy can help you further protect your loved ones and meet your financial goals. Contact an agent today to learn more about Aflac’s life insurance policies.
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1 Forbes – How Does Life Insurance Work? Updated September 2, 2022. https://www.forbes.com/advisor/life-insurance/how-it-works/. Accessed May 10, 2023.
2 National Association of Insurance Commissioners – Learn How to Use the NAIC Life Insurance Policy Locator. Updated September 7, 2021. https://content.naic.org/article/learn-how-use-naic-life-insurance-policy-locator. Accessed May 10, 2023.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
68000 series: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400.65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series: Whole: In Arkansas, Delaware & Oregon, Policy Q60100M. In Idaho Policy Q60100MID. In Oklahoma, Policy Q60100MOK. In Texas, Policy Q60100MTX.Q60000 series: Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Oregon, Texas, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C.
Final Expense insurance coverage is underwritten by Tier One Insurance Company. In AR, AZ, ID, OK, OR, PA, TX and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions.
Aflac’s family of insurers include Aflac, Aflac New York, Continental American Insurance Company, and Tier One Insurance Company.
Aflac WWHQ | Tier One Insurance Company | 1932 Wynnton Road | Columbus, GA 31999.
Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211