Life insurance

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Life insurance is a contract between the insured, or owner, and a life insurance company. The owner pays a stipulated premium to the insurance company. If the insured dies while the policy is inforce a death benefit is paid to the beneficiary. Some policies accumulate cash value which is available by loan or upon surrender to the owner. Also, some policies have accelerated death benefits which may be available if the insured is expected to die within six months to a year.[1]

Determining family life insurance needs

This worksheet assumes that both spouses are working and will continue to work if one partner dies prematurely. Replacing 100% of your income may be a good starting place. This should leave the survivor with the same standard of living. Some expenses go down when one partner dies but other expenses, such as childcare, usually go up.

Family Life Insurance Needs Analysis[2]
Spouse #1 Dies Spouse #2 Dies
A. Income Need for Family
   Annual Income Needed $___________________ $___________________
   - Social Security/Fixed Benefit  ___________________  ___________________
= Income Shortage ÷ Assumed Interest Rate[note 1]  ___________________  ___________________
= Amount of Capital Needed  ___________________  ___________________
+ B. Last Expense Fund  ___________________  ___________________
+ C. Emergency Fund (3 to 6 months income)  ___________________  ___________________
+ D. Education Fund  ___________________  ___________________
= E. Total dollars needed  ___________________  ___________________
- F. Present Insurance/Assets  ___________________  ___________________
= G. New Insurance Needed $___________________ $___________________

Locating a lost policy

If you’ve lost a loved one, determining if a life insurance exists, or obtaining the details of an existing policy, may be difficult. Here are a few suggestions:

  • Search personal records: Look through files, safe deposit boxes and other areas where your loved one might have kept insurance documents.[3]
    • If the policy is not evident, try to find the name of the life insurance company that issued the policy. For clues, go through bank and credit card statements to look for evidence of premium payments made to an insurance company.[4]
  • Contact financial advisors: Present or prior attorneys, accountants, investment advisors, bankers, business insurance agents/brokers and other financial professionals might have information about the deceased’s life insurance policies.[4]
  • Check with employers: Contact the employee benefits administrators of your relative's former employers to see if any group life insurance policies are still in effect or if your loved one purchased additional voluntary coverage at work.[3]
  • Check the mail: Look for premium notices or dividend notices. If a policy has been paid up, there will no notice of premium payments due; however, the company may still send an annual notice regarding the status of the policy or notice of a dividend.[4]
  • Review income tax returns: Life insurance companies pay interest on accumulations on permanent policies and charge interest on policy loans.[4]

Insurance companies will assist you to locate a lost policy. All you need is the name of the insurer that issued the policy; from there you can contact the insurer to start a claim, even if you don’t know the policy number. A list of policy locators is in the section below.

If you are unsure a policy exists, or you don’t know the name of the insurance company, the NAIC (National Association of Insurance Commissioners) provides a free policy locator that will place inquiries with participating companies. Start here: Life Insurance Policy Locator Service

Insurance companies are obligated to find policy beneficiaries. If no beneficiaries are found, they are required by law to turn unclaimed funds over to the state (called "escheatment").[5]

The unclaimed funds are turned over into your state's unclaimed property division. Insurance companies turn policy proceeds over to these divisions when they know the insured person has died but can't find the beneficiary. The National Association of Unclaimed Property Administrators website provides links to unclaimed property divisions in each state. See: Search for your unclaimed property[3]

Lost policy finders

Below are several life insurance company policy location services:


  1. Please note that the calculation of Income Shortage, can be done in two ways. Dividing the shortage by an assumed interest rate results in the amount of capital to produce desired income indefinitely. If you prefer to provide income for a fixed period, just multiply the Income Shortage by the number of years desired.

See also


  1. Definition of life insurance by forum member mephistophles (Lee E. Marshall), a Chartered Life Underwriter (CLU)
  2. Family Needs Analysis worksheet by forum member mephistophles (Lee E. Marshall), CLU.
  3. 3.0 3.1 3.2 "How to find lost life insurance policies". December 19, 2019. Retrieved 28 Jan 2020.
  4. 4.0 4.1 4.2 4.3 "12 steps for locating a lost life insurance policy". Insurance Information Institute, Inc. Retrieved 28 Jan 2020.
  5. "Policy Finder". Metropolitan Life Insurance Company. Retrieved 28 Jan 2020.

External links

  • Term Life Insurance Quotes (unbiased -- without entering any personal information)
  • How To Buy Life Insurance by The Finance Buff
  • The Life Insurance Course, a comprehensive free online life insurance course from This course is intended as continuing education for insurance agents.
    • The Glossary provides definitions for: Cash value life insurance, Limited Payment Life Insurance, Survivorship life insurance, Term Insurance, Universal Life Insurance, Variable Life Insurance, Variable Universal Life Insurance, and Whole life insurance. (Thus demonstrating the complexity of these products.)
  • Unclaimed life insurance benefits 5 reasons your life insurance benefits might go unclaimed, Insurance Information Institute, Inc., viewed January 28, 2020.