A considerable amount of insurance money never reaches families, simply because the people left behind did not know the deceased held a policy. So where does that money go, and how do we prevent it happening to our own family?

The money does not disappear immediately

When an event covered by the contract occurs but nobody claims, the benefit remains the right of the beneficiary or of the estate under the law, and a claim is subject to the prescription period the law sets. If that period passes with nobody exercising the right, the money is transferred to the Life Insurance Fund, an organisation established by law to protect the rights of the insured [check the latest information].

Once it's in the fund, can it still be claimed back?

The good news is that even after money has been transferred to the Life Insurance Fund, an entitled person can still apply to receive it back from the fund, under the applicable criteria and within the period the law specifies, by contacting the fund with evidence of entitlement. So if you have only just discovered a policy belonging to a family member who died some time ago, don't assume it is too late — always check the entitlement first [check the latest information].

How do you find out whether someone who died had a policy?

Practical routes include: going through personal documents and storage; checking past bank statements for premium payments to any insurance company; checking emails and post addressed to them; asking any insurance agent the family knows; and asking insurance companies directly with evidence of being an heir. There is also a route through a central body, the OIC, which can help search for policy information under its conditions [check the latest information].

The common causes of unclaimed money

  • The insured never told anyone the policy existed.
  • The named beneficiary died first and the name was never changed.
  • The contact details in the company's system were too old to reach the family.
  • The policy matured with money to be returned and the holder had forgotten it.

Notice that every one of these is preventable with simple communication and keeping information up to date.

Prevent it today: make a "policy map" for your family

Write down every policy, the policy numbers, the companies, the servicing agents' names and where the documents are kept, all in one place — and tell someone you trust where that document is. Review the beneficiary names so they are current, and update your address with the company every time you move. That alone ensures the money you intended to pass on reaches the people you love.

In short

An unclaimed sum insured is not lost, but it has to go through a search process that should never have been necessary. The best route is not to let a policy be a secret: tell your family today. And if you are currently tracing the policy of someone who has died, start with the routes described above.