Life insurance benefits you didn’t know about

Whole life insurance policies come with a cash reserve that you can access while you’re alive.

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Most people know the general parameters of how life insurance works and who it helps. In exchange for a monthly premium (often discounted if paid annually) to a provider, the insured secures a financial safety net for their loved ones in the event of their death. Coverage amounts range significantly from tens of thousands of dollars to more than $1 million

The advantages of life insurance are typically clear and the costs for millions of Americans are often negligible. You may already even have a plan provided to you as part of your employer-provided health benefits package

But there are some perks of life insurance that you may not have known about. Buried in the fine print of an application, there are multiple ways to utilize a life insurance plan besides just letting it sit idle for times of emergency. These benefits can help you both while you’re alive and in the event of your death.

If you don’t have life insurance currently then start by getting a free price quote so you know exactly what to expect.

Life insurance benefits you didn’t know about

Here are three life insurance benefits you may not have known.

You can get your premiums returned

Most policyholders are used to paying for insurance protections that they never wind up needing. But the money you use to pay your life insurance premium doesn’t necessarily need to go to waste. By adding a “return of premium” rider to your policy you can have the payments you made returned back to you if you wind up outliving your pre-determined term. 

This rider – which comes with an extra cost – may be particularly helpful for applicants

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Could you have secret life insurance money waiting to be claimed?

When your loved one dies and you know you’re the beneficiary of their life insurance policy, getting the payout is typically pretty simple. You submit a claim form and a copy of the death certificate. Then the insurer usually pays the claim within a few weeks.

But what if you don’t know whether your family member had a life insurance policy? Or what if you can’t locate the policy documents? If no one notifies the company of the insured person’s death, it’s possible that money could go unclaimed. Even if your loved one died years ago, you could have unclaimed life insurance money because there’s no deadline on collecting benefits.

Wondering if you could have lost life insurance money out there? Keep reading to learn how to start your search.

How Do Life Insurance Companies Locate Beneficiaries?

Life insurance companies aren’t automatically notified when someone dies. They only find out the insured person has died when the beneficiary files a claim. If no one notifies the insurer of the person’s death, it’ll continue charging premiums. Sometimes when the premiums go unpaid, the company may deduct that money from the policy’s benefits.

However, it’s becoming increasingly rare for death benefits to go unclaimed. That’s because under the Unclaimed Life Insurance Benefits Act, most insurers check the Social Security Administration’s master death file semiannually to search for policyholders. If their search identifies someone who has died, they must attempt to locate the beneficiary within 90 days.

Not all states have adopted the Unclaimed Life Insurance Benefits Act, but most major insurers follow its recommendations.

Pro tip: Any death benefit you receive isn’t taxable and doesn’t need to be reported to the IRS. However, any interest you receive from the policy is taxable income.

6 Ways to Find Lost Life Insurance Money

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