Can I Name My Estate As Beneficiary
If you name your estate as beneficiary, the death benefit will become a part of your estate. The funds will be used according to the terms of your will. If you choose this option, keep in mind that the death benefit will be subject to estate administration tax. The estate administration tax is charged on the total value of your estate, including all property, possessions and financial assets. Creditors may claim the death benefit to pay for any outstanding debts. This could result in your family receiving less money than they would if you named them as beneficiaries.
Obtain Proof Of Death
Statement of death
The statement of death issued by the funeral home is sufficient in most situations instead of a death certificate.
If the person died abroad, you may be able to register the death and receive an official death certificate through the funeral home in the country where the death occurred.
Once registered, the vital statistics office of the province or territory issues a death certificate.
You may need to request multiple copies of the death certificate in order to:
- cancel benefits
- make a life insurance claim
- sell the house of the deceased person, etc.
- Order copies of a death certificate
The Unclaimed Life Insurance Database
The National Association of Insurance Commissioners and some state insurance departments have created tools to help consumers search for lost life insurance policies.
Department of Insurance: Some states let you search for a policy through their DOI site. They also list department contact information if you want to talk to someone directly.
Life Insurance Policy Locator Service: Created by NAIC, this lookup tool asks for information like your address, relationship to the deceased, and the deceasedâs Social Security number, then asks their partner insurers to search their records for matching policies.Â;
MissingMoney.com: A site endorsed by the National Association of Unclaimed Property Administrators that aggregates state records of unclaimed funds.
NAUPA: NAUPAâs own search tool allows you to search for unclaimed money by state.
It may take some time to hear backâNAIC notes that it could take up to 90 business days for insurers to respond to a requestâyouâll be contacted directly if you are a beneficiary or otherwise authorized to get information about the missing policy.
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How To Find A Life Insurance Policy When Someone Dies
There are several ways to find a life insurance policy when someone dies. These include internet tools and some detective work on your own.
The National Association of Insurance Commissioners a group that represents the chief insurance regulators of each of the 50 United States, the District of Columbia and U.S. Territories has an online tool that can help track down unclaimed life insurance policies.
Once you fill out an online form on the policy locator tool, the NAIC will ask participating insurance companies to scour their records to see if they have a life insurance policy in the name of the deceased person you listed on the form. The companies will also look for policies that name you as a beneficiary.
The NAIC tool has been around since 2016. More than 145,000 people had used it as of July 31, 2020. In that time, the policy locator had found 46,665 matches with claims totaling $650,520,451.
How A Life Insurance Policy Works
A life insurance policy is a contract between an insurer and an individual. The policy itself typically insures the individual who bought it, but it can insure someone else as well, such as a child or a business partner.
When the insured person dies, the policy pays out a predetermined amount to the policyholder’s beneficiary.
The two main types of life insurance policies are:
- Term life insurance: Term life provides coverage for a specific period or term. If the insured policy dies within the term, the life insurance policy pays out to the beneficiaries. Otherwise, it simply lapses at the end of the term.
- Whole life insurance: This type of permanent life insurance policy remains in place for the insuredâs lifetime as long as he or she pays premiums. Unlike term life insurance, a whole life insurance policy doesnât expire after a specific period.
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Naming Your Estate As The Beneficiary
If you name your estate as the beneficiary. The estate will distribute the death benefits according to the terms of your will. The proceeds of the death benefit will become part of your estate and will be subject to estate taxes. If the death benefit is part of your estate, creditors may claim the death benefit to pay for your outstanding debts.
If you name your estate as your beneficiary:
- the death benefit will become part of your estate
- the death benefit will be distributed according to the terms of your will
- the money will be subject to taxes when your estate is settled
Who Can Be A Beneficiary
You can name your spouse, children, dependants, another family member, a friend or a charity as a beneficiary. If you name more than one beneficiary, the insurance company will divide the death benefit between them. You can assign percentages of the death benefit to each beneficiary, e.g. 50 per cent to your spouse, 50 per cent to your children.
Contact The Deceaseds Financial Advisors
Anyone who advised the deceased on financial matters or helped themmanage their estate â such as an accountant, attorney, financial planner, banker, or business partners â might be able to track down their insurance policy, or at least tell you which company they purchased the policy from.
Checking Your Claims Status
You can check the status of your claim online by using the Claim ID which can be found in the upper right-hand corner of your claim form or on any correspondence from the Bank of Canadas Unclaimed Balances office.
If you have supplied us with your email address, you will be notified when the status of your claim has changed.
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Why Life Benefits Go Unclaimed
Life insurance proceeds can go unclaimed for a few reasons. Sometimes beneficiaries dont know they’re named on the policy, or that one even exists. They may have moved from the address listed on the contract, so the insurer can’t locate them. They may not know how to file a claim if the insurer goes out of business and transfers its policies to another without notifying beneficiaries.
The insurer may lose contact, ending the paper trail, if the policyholder moves and doesn’t submit a change of address. In some cases, the insurer doesnt know they’ve died because no one sends a death notice.
What To Do If You Find Out A Policy Exists On Your Life
If you discover a life insurance policy on you, your best and first line of defense is to work with the insurance company to resolve the issue. If they’re uncooperative, contact the police and your state insurance department.
Insurance fraud is a serious crime. Stump says someone who obtains an illegal life insurance policy could face jail, probation or a significant fine.
“Depending on the depth of information that the perpetrator provided, they could also be on the hook for identity theft, wire fraud, or mail fraud,” he says. “If the action involves people in different states or transactions across state lines, it could even be a federal offense. This would result in time in federal prison and additional fines.”
Secret life insurance policies are rare, but this type of insurance fraud does happen. Protect yourself by following the steps we’ve outlined to minimize the likelihood that someone garners a big insurance payout at your expense.
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What Is Unclaimed Life Insurance
A life insurance policy is unclaimed when the insured person passes away and the named beneficiary doesnt claim the benefit from the policy.
There are billions of dollars of unclaimed life insurance money in the U.S. Many family members are unaware that their loved ones held a life insurance policy and are oblivious beneficiaries.
If a loved one has passed and you are the beneficiary, you can find out if there is unclaimed money or unclaimed property by performing a search at a free website called MissingMoney.com. The site allows you to scan a single state or all states that participate. If you need to continue your search, you may opt for other options, such as looking through your loved ones financial files, checking with other online services, or contacting previous employers or unions. Below well cover the specifics of how to go about your search.
But first, lets cover if you could you be owed a life insurance payout.
National Defence And Veterans Affairs Canada
If the deceased person was a serving or a former member of the Canadian Armed Forces, follow these guidelines:
Serving Canadian Armed Force member
Inform the chain of command of the members unit, squadron or ship. A member of the unit will assist you during this difficult period.
Former Canadian Armed Force member / Veteran
Inform the Government of Canada Pension Centre if the deceased person was a Canadian Armed Forces Pension Plan member or a pension recipient.
Inform Veterans Affairs Canada if the Veteran was receiving services or benefits.
Consult Veterans Affairs Canada information on Death and bereavement.
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Canadian Insurance Industry Trends In 2021
10. The insurance industry contributes more than $860 billion to Canadas economic growth.
The insurance industry in Canada operates in every region of the country, with many companies specialising in life insurance. Over the years, their valuable contribution to economic growth accumulated to more than a whopping $860 billion.
Most of this money was allocated to long-term investments in innovation and infrastructure projects. Additionally, insurers create over 157,000 jobs across the country. So, its safe to assume that the future of the insurance industry in Canada is looking bright.
11. Life and health insurers paid a total of $103 billion in benefits to Canadians in 2019.
Thanks to these benefits, Canadians were able to access prescription medicines, live more comfortably in retirement, and cope with critical illnesses. Of the total $103 billion in paid benefits from insurers in 2019 alone, $53.3 billion went to retirement annuity payments. Additionally, $38.1 billion were allocated to health benefits and $12.1 billion to life insurance benefits.
12. Completed annual transactions among brokers and agents increased by 140% since 2013.
According to Canadian life insurance statistics, an astonishing 626 transactions were recorded in 2018, setting the record as the highest annual total. At the same time, there was a decline in the number of buyers completing acquisitions, 142, down from 177 in 2017. This number stood at 152 in 2016.
Question 2: I Have Children How Much Life Insurance Do I Need
If you have kids, there are several areas that you need to calculate into your financial planning :
Food Health Care Personal Care School and recreation Transportation Housing Child Care
According to MoneySense in 2002, overall costs of raising a child to the age of 18 add up to $243,660. You should consider that this number does not include any post-secondary education costs. If you consider the inflation numbers of Statistic Canada, overall costs of raising a child to the age of 18 in 2020 would add up to $276,228. This means $1,212 per month over the course of 19 years. Having several children will obviously increase this amount correspondingly. For example, if you do not consider some item re-use such as clothing items, toys, etc., raising three kids to the age of 18 would cost you around $830,000 . Have you calculated these numbers into your life insurance protection?
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What To Ask Before Buying Life Insurance In Canada
Life insurance is an extremely important part of financial planning, but not many people want to talk about it. To make this topic more accessible, InsurEye is laying out the statistical facts and other useful pieces of information to inform Canadians about life insurance. After discussions with consumers, we have identified the main questions and concerns of Canadians:
What amount of life insurance should I choose? How much insurance protection do I need if I have children? What are the best life insurance companies? What kind of life insurance policy do I need?
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How To Find A Lost Life Insurance Policy
In the last year, The OmbudServices for Life and Health Insurance fielded 1,290 calls from people looking to recover a life insurance policy that had potentially been lost.
They are a national independent complaint resolution and information service for consumers of Canadian life and health insurance products and services, including life, disability, employee health benefits, travel, and insurance investment products such as annuities and segregated funds.
If you suspect that you or someone you know are potential beneficiaries of a lost life insurance policy, OLHI general manager Brigitte Kent recommends turning over every stone you can think of before approaching her organization.
The first conversation that our counselors would have with the caller would be to go through a list of suggestions of where else to look, she says.
The Questions Youll Be Asked
- Did you look in the deceaseds bank accounts to see if theres any money coming out from a specific insurance company?
- Have you called the deceaseds employer?
- Have you called any associations the deceased belonged to?
We really ask the person representing the estate to really do their due diligence and look through their records, says Kent. Not because we want to discourage a search, but because, in a lot of cases, theyll find stuff on their own.
The Rules of the Game
The Hunt Begins
- Date of death
- Social Insurance Number
Keep in Mind
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If A Claim Has More Than One Owner
If there is more than one claimant, all claimants information needs to be provided, including their signatures and other documentation to support their identity and balance entitlement.
- An unclaimed balance held by two or more names joined by or, may be claimed in its entirety by any of the balance holders or by the estates of any deceased balance holders, if applicable.
- An unclaimed balance held by two or more names joined by and, will be split equally between the living holders and the estates of any deceased balance holders, if applicable.
In either case, when a claim is made on behalf of a deceased balance holder, the claimant must be an authorized representative of the deceased balance holder.
Obtaining A Death Certificate When Filing A Life Insurance Claim
To claim a death benefit payout from a life insurance policy you will need two things: A copy of the life insurance policy and a copy of the policyholders death certificate.
A death certificate is a legal document recording a persons death. Obtaining a death certificate copy is likely easier and more straightforward than tracking down a lost or unclaimed life insurance policy.
Where to Obtain a Death Certificate
- Your county coroner’s office or state vital records department
- The funeral home or mortuary that handled the deceased
Death certificates are public records in some, but not all states. In some states, you will need to provide proof of your relationship to the deceased. In those cases, generally only immediate family members, government agencies, the executor of the deceaseds estate and funeral directors can request an official copy.
To request a copy, youll need to show a valid government-issued photo ID such as a drivers license and proof of your relationship to the deceased such as a birth certificate or marriage license.
The life insurance company will also have its own rules on how to submit the death certificate. This varies from company to company, so you should check with the company about its requirements before submitting the death certificate along with the policy.
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What Happens To Unclaimed Life Insurance Money
Some states are placing pressure on life insurance companies to pay out unclaimed death benefits. Because of this, insurance companies routinely use Social Security data to check to see if policyholders are still alive. When they find out one passed away, theyll do research to try to find the beneficiaries.