If no beneficiary is named in the policy, the terms of the policy itself will dictate where the proceeds should go, such as to the insured's next of kin or into their estate, where it will be distributed according to the insured's estate plan or California laws of intestacy if the insured left no will.
Many states require insurance companies to check the Social Security “Master Death File” for deceased policy holders and to try to notify their beneficiaries when they find a policyholder on that list. But that can take time. And it's not the rule in every state.
The answer is no
Purchasing a life insurance policy always involves the person named on the policy. Insurance companies will not allow anyone to buy insurance in your name without your agreement. The only exception to the rule is when a parent or grandparent purchases a child's life insurance policy.
Contact the life insurance company
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: Policyholder's name and date of birth. Policyholder's date of passing.
In many cases, it takes anywhere from 14 to 60 days for beneficiaries to receive a life insurance payout. But many factors impact this time frame. These include the insurance company's procedures, when the claim is filed, how long the policy was active, the cause of death, and state laws regarding insurance payouts.
If they used a Will, then it is the executor who should be notifying you, generally within a few months of the death. If they used a Trust, then it is the trustee who should be notifying you. The timeline is much shorter. California laws, for example, require that beneficiaries are notified within 60 days of the death.
It's most common to take out a life insurance policy on a parent, child, sibling, or business partner. You can't get life insurance coverage on someone else without their knowledge. The person you're insuring needs to consent to the application process and sign the policy.
If you suspect that a loved one had a life policy, the National Association of Insurance Commissioners (NAIC) has created a Life Insurance Policy Locator service to help consumers locate benefits from life insurance policies or annuity contracts purchased anywhere in the United States.
If you outlive your term (let's hope this is the case), then typically one of two things happens: The policy will simply end, and you'll no longer owe payments or be covered, or. The insurer might allow you to keep your coverage by converting all or a portion of the policy into permanent life insurance.
Life insurance may not pay out if the policy expires, premiums aren't paid, or there are false statements on the application. Other reasons include death from illegal activities, suicide, or homicide, with insurers investigating claims thoroughly.
Cash distributions are common, especially when the trust holds funds or liquid investments. The trustee re-titles assets in the name of beneficiaries. Beneficiaries obtain ownership of the actual property or investments, which could include real estate, stock certificates, or alternative, non-liquid assets.
As a standard life insurance beneficiary rule, you must explicitly identify each beneficiary with their full name and Social Security number. Pro tip: Do you live in a community property state? If so, you'll need your spouse's consent to designate a primary beneficiary other than them.
This means that an executor can override a beneficiary's wishes if those wishes contradict the expressed terms of the will, do not comply with applicable laws, and the executor acts in the best interest of the estate and its beneficiaries.
Typically, you might receive a certified letter from the personal representative notifying you that you are a beneficiary. However, you can always contact the estate attorney to explain the will to you.
What is the average life insurance payout? Not all life insurance payouts are created equal, and may depend on several factors covered below. On average, however, a typical life insurance payout in the U.S. is about $168,000.
The best way is to contact the policy's issuer (the life insurance company). Their records are key: even if you see your name listed on an old policy document, the deceased may have changed their beneficiaries (or the allocation of benefits among those beneficiaries) after that document was printed.
Life insurance policies aren't typically public record. Because they're paid out to a designated beneficiary, they don't need to go through probate, which would make them a matter of public record.
The simple answer is yes—you can buy life insurance for someone else if they agree and are aware of the decision. However, you can't buy a plan for anyone without an insurable interest and consent from the person you are buying life insurance for.
A third party can't take out a life insurance policy on you without your knowledge and consent. The person must first notify you of their intentions, and obtain your formal agreement to the policy.
Most life insurance companies require you to name at least one beneficiary. If beneficiaries are not named, the life insurance proceeds can go to your estate. If you don't have a will, your estate, including the death benefit, may need to go through probate court.
If you're in a permanent life insurance policy, then you're able to withdraw cash while you're alive through loans, withdrawals, or surrendering the policy.
While there is no strict deadline, beneficiaries are usually notified within a few weeks to a few months after someone's death.
For instance, California probate code provides that beneficiaries of a trust must be notified by the trustee within 60 days of the trustor's death.
Contacting beneficiaries
The executor or personal representative will contact each beneficiary. That is often done through written communication, such as a letter or email, providing details about the deceased's passing, their role as executor, and the beneficiary's rights and entitlements.